Tech Trends 2020
Contents
while (foo = getNext(bar)) { lterThis = false; Introduction | 3 if (condition1) { doSomething(); lterThis = true if (condition2) { doSomethingElse(); lterThis = glob(); } } if (! lterThis) { process(foo); } }
Named tokens: 20 Symbolic tokens: 5 ("!", "=", etc.) Brackets and parenths: 24 Executive summary | 5
while (foo = getNext(bar)) { lterThis = false; if (condition1) { doSomething(); lterThis = true if (condition2) { doSomethingElse(); lterThis = glob(); } } if (! lterThis) { process(foo); } } Macro technology forces | 9 Named tokens: 20 Symbolic tokens: 5 ("!", "=", etc.) Brackets and parenths: 24
Ethical technology and trust | 25
Finance and the future of IT | 43
Digital twins: Bridging the physical and digital | 59
Human experience platforms | 79
Architecture awakens | 95
Horizon next: A future look at the trends | 111
Authors and acknowledgments | 124
while (foo = getNext(bar)) { lterThis = false; if (condition1) { doSomething(); lterThis = true if (condition2) { doSomethingElse(); lterThis = glob(); } } if (! lterThis) { process(foo); } }
Named tokens: 20 Symbolic tokens: 5 ("!", "=", etc.) Brackets and parenths: 24 Tech Trends 2020
Trending the trends: Eleven years of research
CLOUD COGNITIVE DIGITAL E PERIENCE CORE RISK BUSINESS OF TECHNOLOGY BLOCKCHAIN ANALYTICS DIGITAL REALITY
Ethical Finance Human technology Horizon the future Architecture Digital experience trust next of IT awakens twins platforms 2020
DevSecOps Beyond Connectivity NoOps in a AI-fueled Intelligent Beyond the cyber the digital serverless
2019 of tomorrow organizations interfaces marketing imperative frontier world
The new Risk Exponentials CIO survey: No-collar Reengineering API Blockchain to Enterprise Digital Manifesting data
2018 core implications watch list workforce technology imperative blockchains reality legacy sovereignty
Risk Exponentials CIO survey: IT Inevitable Everything- Trust Dark Machine Mixed Navigating
2017 implications watch list unbounded architecture as-a-service economy analytics intelligence reality legacy
Reimagining Social CIO survey: core Risk impact of Creating Right- Autonomic Democratized Industrialized Internet AR VR
2016 systems implications exponentials legacy speed IT platforms trust analytics of Things go to work
CIO as chief IT worker Software- Core Risk Exponentials API Amplified Ambient Dimensional integration of the defined
2015 renaissance implications economy intelligence computing marketing officer future everything
Technical In-memory Cyber Exponentials CIO as Real-time Cloud Cognitive Wearables Digital Social Industrial debt revolution security venture DevOps orchestration analytics engagement activation crowdsourcing 2014 reversal capitalist
Reinventing No such CIO as IPv6 (and Finding the Gamification Design as Business Mobile only Social the ERP thing as postdigital this time face of goes to a discipline of IT and beyond reengineering 2013 engine hacker-proof catalyst we mean it) your data work
Outside-in Digital Measured Hyper-hybrid Big data Geospatial Enterprise User Social Gamification architecture identities innovation clouds goes to visualization mobility empowerment business 2012 work
Almost- The end of Cyber CIOs as Capability Real Visualization Applied User Social enterprise the death intelligence revolutionaries clouds analytics mobility engagement computing 2011 applications of ERP
Best-of-breed CIO Value-driven Services Cyber Virtual- Cloud Information Information Wireless User Asset enterprise operational application thinking security ization revolution automation management mobility engagement intelligence 2010 applications excellence management
2 Introduction
Introduction
N 2020, THE next stage of digital’s evolution welcomes us with the promise of emotionally intelligent interfaces and hyperintuitive cognitive capabilities that will transform business in unpredictable ways. Yet I as we prepare for the coming decade of disruptive change, we would be wise to remember an important point about yesteryear’s leading-edge innovations: Architects of the 1980s designed mainframe systems that continue to run and generate business value today. Sure, they’re outmoded by today’s standards, but how many of us will build systems that run for decades? And how’s that for a legacy?
Architecting for longevity and adaptability requires a deep understanding of both today’s realities and tomorrow’s possibilities. It requires an appreciation for the technology and market forces driving change. And finally, it requires a long-term commitment to focused and incremental progress.
Against this backdrop, we present Tech Trends 2020, Deloitte’s 11th annual examination of the emerging technology trends that will affect your organization over the next 18 to 24 months. Several of this year’s trends are responses to persistent IT challenges. Others represent technology-specific dimensions of larger enterprise opportunities. All are poised to drive significant change.
We begin Tech Trends 2020 with a timely update on the nine macro technology forces we examined in last year’s report. These forces—digital experience, analytics, cloud, core modernization, risk, the business of technology, digital reality, cognitive, and blockchain—form the technology foundation upon which organizations will build the future. This year’s update takes a fresh look at enterprise adoption of these macro forces and how they’re shaping the trends that we predict will disrupt businesses over the next 18 to 24 months. We also look at three technologies that will likely become macro forces in their own right: ambient experience, exponential intelligence, and quantum.
In subsequent chapters, we discuss trends that, though grounded in today’s realities, will inform the way we work tomorrow. Our chapter on ethical technology and trust takes an in-depth look at how every aspect of an organization that is disrupted by technology becomes an opportunity to lose—or earn—the trust of customers, employees, and stakeholders. We follow with a discussion of human experience platforms that will enable tomorrow’s systems to understand context and sense human emotion to respond appropriately. Pioneering organizations are already exploring ways in which these platforms can meet the very human need for connection.
3 Tech Trends 2020
Trends evolve in unexpected ways. And often, the most interesting opportunities happen at the places where they intersect. Several of this year’s trends represent fascinating combinations of macro forces and other technology advances. For instance, digital twins represents the culmination of modernized cores, advanced cognitive models, embedded sensors, and more—a recipe that is in itself a trend, even as it builds on evolving individual technologies.
We hope Tech Trends 2020 offers the insights and inspiration you will need for the digital journey ahead. The road from today’s realities to tomorrow’s possibilities will be long and full of surprises, so dream big and architect accordingly.
Scott Buchholz Bill Briggs Emerging Technology research director Global chief technology officer and Government & Public Services Deloitte Consulting LLP chief technology officer [email protected] Deloitte Consulting LLP Twitter: @wdbthree [email protected]
4 Executive summary
Executive summary
Macro technology Ethical technology Finance and the forces and trust future of IT
Last year’s Tech Trends report In a growing trend, leading As technology strategy has explored nine macro technology companies are realizing that increasingly become a core forces that form the backbone every aspect of their organization part of business strategy in of business innovation and that is disrupted by technology organizations, the demand for transformation. For a decade, represents an opportunity to improved outcomes has grown. we’ve been tracking the gain or lose trust. They are To achieve this, we expect to emergence and eventual ascent approaching trust not as a see more IT and finance leaders of digital experience, analytics, compliance or public relations working together to develop cloud, digital reality, cognitive, issue, but as a business-critical flexible approaches for innovating blockchain, the business of IT, goal to be pursued. In this light, and operating at the speed risk, and core modernization. This trust becomes a 360-degree of agile. Whether under the year’s update takes a fresh look undertaking to ensure that name of supporting innovation, at enterprise adoption of these the many dimensions across defending against disruption, or macro forces and explores how an organization’s technology, enabling digital transformation, they’re shaping the tech trends processes, and people are IT will need finance’s support to we predict will disrupt businesses working in concert to maintain effectively rethink governance over the next 18 to 24 months. the high level of trust expected of technology innovation, Bill Briggs To realize the full promise of by their many stakeholders. adapt to Agile methodologies, Global chief technology officer these forces, organizations are Business leaders are reevaluating and secure creative capital. Deloitte Consulting LLP exploring how they intersect how their products, services, and The work of transitioning to [email protected] to create more value as well as the decisions they make—around new finance, budgeting, and new ways to manage technology managing data, building a accounting processes that Twitter: @wdbthree and the technology function. partner ecosystem, and training support innovation will not This necessary step is becoming employees, among others—build happen overnight. But there increasingly important as trust. CIOs are emphasizing are strong incentives for both businesses prepare to tackle “ethical technology” and creating CIOs and CFOs to find ways to emerging forces that appear a set of tools to help people effectively fund innovation. Some farther out on the horizon: recognize ethical dilemmas when companies are already embracing ambient experience, exponential making decisions on how to use this trend and are exploring intelligence, and quantum. disruptive technologies. Leaders possibilities. They are at the who embed organizational values leading edge and will likely be and tech ethics across their the first to enjoy the competitive organization are demonstrating a advantages that come when commitment to “doing good” that finance funds innovation at the can build a long-term foundation speed of agile. of trust with stakeholders.
5 Tech Trends 2020
Digital twins: Bridging Human experience Architecture awakens the physical and digital platforms
The idea of using virtual models A growing class of AI-powered Growing numbers of technology to optimize processes, products, solutions—referred to as and C-suite leaders are or services is not new. But “affective computing” or “emotion recognizing that the science of organizations are finding that AI”—are redefining the way technology architecture is more increasingly sophisticated we experience technology. strategically important than ever. simulation and modeling In the coming months, more Indeed, to remain competitive capabilities, power visualization, companies will ramp up their in markets being disrupted better interoperability and responses to a growing yet by technology innovation, IoT sensors, and more widely largely unmet demand for established organizations will available platforms and tools technology to better understand need to evolve their approaches are making it possible to create humans and to respond to us to architecture—a process that simulations that are more more appropriately. Historically, can begin by transforming the detailed and dynamic than computers have been unable role technology architects play ever. Digital twins can increase to correlate events with human in the enterprise. In the coming efficiency in manufacturing, emotions or emotional factors, months, we expect to see more optimize supply chains, transform but that’s changing as innovators organizations move architects predictive field maintenance, aid are adding an emotional quotient out of their traditional ivory in traffic congestion remediation, (EQ) to technology’s IQ, at towers and into the trenches. and much more. Organizations scale. Combining AI, human- These talented, if underused, making the transition from selling centered design techniques, and technologists will begin taking products to selling bundled technologies currently being used more responsibility for services products and services, or selling in neurological research to better and systems. Likewise, they as-a-service, are increasing use of understand human needs, human will become involved in system digital twins. As capabilities and experience platforms will be able operations. The goal of this shift sophistication grow, expect to see to recognize a user’s emotional is straightforward: move the most more organizations use digital state and the context behind experienced architects where they twins to optimize processes, it, and then respond suitably. are needed most—into software make data-driven decisions Indeed, the ability to leverage development teams that are in real time, and design new emotionally intelligent platforms designing complex technology. products, services, and business to recognize and use emotional Investing in architects and models. In the long term, realizing data at scale is one of the biggest, architecture and promoting their digital twins’ full promise may most important opportunities for strategic value enterprisewide require integrating systems and companies going forward. can evolve this IT function into a data across entire ecosystems. competitive differentiator in the digital economy.
6 Executive summary
GET IN TOUCH
TALK WITH OUR TECH TRENDS TEAM
Reach out with questions on emerging tech and Horizon next: A future access new content. look at the trends www.deloitte.com/insights/tech-trends [email protected] @DeloitteonTech There’s growing interest among enterprises in looking beyond what’s new to what’s next, and ACCESS INSIGHTS FOR TECH LEADERS no wonder—an understanding of what’s coming may inform Gain new perspectives through research and early planning and enable success stories from our CIO Program and relationships that could make Executive Women in Tech leaders. reaping future rewards possible. www.deloitte.com/us/CIOtrends Leading organizations have disciplined, measured innovation www.deloitte.com/us/CIOInsider programs that align innovation Deloi.tt/women with business strategy and a long-term technology landscape. They take a programmatic SUBSCRIBE TO DBRIEFS WEBCASTS approach to sensing, scanning, vetting, experimenting, and Register to attend upcoming live webcasts on emerging tech topics, led by Deloitte specialists, incubating future macro and access on-demand archives. technology forces—such as ambient experiences, exponential www.deloitte.com/us/techdbriefs intelligence, and quantum—until the technology, the market, and the business applications are STAY IN TOUCH WITH DELOITTE INSIGHTS ready on an enterprisewide scale. Other organizations should Download the Deloitte Insights and Dow Jones app consider following suit, using the to access articles, news, the Daily Executive Briefing knowledge gained to reimagine from our C-suite journals, and notifications as new and transform their enterprises, content is available. agencies, and organizations www.deloitte.com/insights before they themselves are disrupted. In a world of seemingly www.deloitte.com/insights/app infinite unknowns, it is possible to @DeloitteInsight focus attention on a meaningful collection of known technologies that, taken together, can help you chart a path to the next horizon.
7 TREND SUMMARY
Exploring intersections of the macro technology forces can drive purposeful, transformational change.
ENABLERS FOUNDATION DISRUPTORS HORIZON NEXT
DIGITAL BUSINESS OF DIGITAL AMBIENT EXPERIENCE TECHNOLOGY REALITY EXPERIENCE
r m c a e t ee i eeri ca ita eima i i ra s are t u i uit us uma ce tere esi ec y e a eme t i ter aces
EXPONENTIAL ANALYTICS RISK COGNITIVE INTELLIGENCE
ata ma a eme t y er re u at ry re ict rescri e ym ic ee a arc itecture a i si ts a et ics au me t a aut mate r a reas i
CORE CLOUD MODERNIZATION BLOCKCHAIN QUANTUM
exi i ity a es a i t e eart istri ute trust Ex e tia u i uity t e usi ess a assets c m utati Macro technology forces
Macro technology forces A second look at the pillars of past, current, and future innovation
S THE UNPRECEDENTED expansion of Digital experience, analytics, and cloud are technology-driven innovation fuels a high- enabling technologies that have proven their value— A stakes game of competitive whack-a-mole, and then some—over the past decade. They are the an organization’s ability to exploit technology to basis of numerous successful corporate strategies its advantage will determine its survival. Leaders and new business models. across sectors now routinely elevate technology to a strategic business priority. This decade’s disruptors are digital reality, cognitive technologies, and blockchain. Emerging technology trends stir competing Adoption is on the uptake, with business cases emotions and narratives, often pushing us beyond multiplying across industries. We expect these our comfort zones. We’re inseparable from our disruptors to spark surprises throughout the 2020s. mobile devices, but they constantly interrupt us with an overwhelming flow of information. Cognitive The business of technology, risk, and core assistants are helpful time-savers, but most of us modernization are foundational technologies. To find them a little creepy. Investors are bullish on carry the weight of technology-driven transformation flying taxis, but savvy consumers are distrustful of and innovation initiatives, they need to be stable, empty media hype and promises that exceed reality. strong, and sustainable. And a painful tension exists between the possibilities of exciting novel technologies and the responsible These macro forces help drive meaningful exploration of technology domains at the forefront conversations about emerging technologies not of an organization’s 18-to-24-month investment only with the CIO, CTO, and tech shop but with the road map. CEO and the broader C-suite, board members, and line-of-business presidents. Discussing emerging Eleven years of research and deep engagement with technologies in the context of this framework can global business and technology executives have help simplify the tsunami of tech advances and helped bring clarity to this ongoing drama—and a ground in reality the investments and innovations simpler way to think about significant technology coming from labs, startups, and R&D centers around developments. Last year’s Tech Trends report1 the world. Smaller trends can be plotted on the explored nine macro technology forces that have evolutionary trajectory of these macro forces. been—and continue to be—the backbone of business innovation and transformation: digital This year’s update takes a fresh look at enterprise experience, analytics, cloud, digital reality, cognitive adoption of these macro forces and reviews how technologies, blockchain, the business of technology, they’re shaping the tech trends predicted to disrupt risk, and core modernization. For a decade, we’ve businesses over the next 18 to 24 months. We also been tracking their emergence and eventual ascent, peek beyond the horizon and unveil three macro exploring how organizations are using them to forces—ambient experience, exponential intelligence, innovate and drive purposeful, transformational and quantum—that we expect to shape enterprise change. and technology strategies into the 2030s and beyond.
9 Tech Trends 2020
Enablers
When we first began exploring digital experience, analytics, and cloud a decade ago, we understood the possibilities but weren’t quite sure how significant their impact would be. Since then, these now-familiar enabling forces have powered the disruption of businesses, operating models, and markets. They continue to evolve at an astounding pace.
Digital experience continues to be a critical driver of enterprise transformation— in fact, 64 percent of participants in Deloitte’s 2018 global CIO survey say digital technologies will affect their businesses in the next three years.2 Since we examined this trend last year in Beyond marketing: Experience reimagined,3 organizations are dispensing with the traditional notion of customer acquisition-focused marketing, focusing instead on creating more human-centric interactions—including with their Digital own employees and business partners. experience This year, in human experience platforms, we discuss how leading organizations are creating customized, emotionally intelligent digital experiences based on individuals’ behaviors, preferences, and emotions using an integrated array of AI capabilities such as voice stress analysis and microexpression detection tools. Consider, for example, the use of EEG- and machine learning-enabled headsets that shed light on situations that distract or create stress for employees, enabling businesses to design better workflows and work environments.
Analytics includes foundational capabilities and tools that generate powerful insights. Data management, data governance, and supporting architecture are age- old problems that not only are critical building blocks for AI programs but are tactical concerns as organizations work in a dynamic and complex regulatory environment with mandates on data residency, privacy, and usage.
CIOs understand what’s at stake: 60 percent of them say that data and analytics will affect their businesses in the next three years.4 But the issue is becoming only more challenging. The tried-and-true concepts of “data at rest” and “data in use” are joined by “data in motion,” which is supported by tools for data streaming, ingestion, Analytics classification, storage, and access. The good news? Cloud, core modernization, cognitive, and other technologies are bringing fresh solutions to an exceptionally complicated challenge.
Developments in data analytics have helped advance many of this year’s trends. For example, the ability to efficiently and cost-effectively process and integrate large amounts of data has spurred the creation of more advanced digital twin technology— but it has also created a deficit of trust, leading to our focus onethical technology and trust.
Cloud’s takeover of the enterprise is nearly complete. Ninety percent of organizations use cloud-based services5 and they aren’t putting on the brakes. In fact, cloud investments are expected to double as a percentage of IT budget over the next three years.6 As we predicted in 2017, the use of cloud, extending beyond infrastructure, has given rise to everything-as-a-service, enabling any IT function to become a cloud- based service for enterprise consumption.7 Hyperscalers—the handful of massive companies that dominate the public cloud and cloud services industries8 —have Cloud shifted investments higher up the stack, providing platforms for advanced innovation in the other macro forces, including analytics, cloud, blockchain, digital reality, and in the future, quantum.
Cloud has also forced the reimagining of some tried-and-true roles. For example, as we discuss in architecture awakens, giving architects the ability to take full advantage of modern cloud-based offerings plays a critical role in developing complex IT systems and applications in a hybrid world.
10 Macro technology forces
Disruptors
Today’s disruptors—digital reality, cognitive technologies, and blockchain—are the descendants of experience, analytics, and cloud. As the change agents of the coming decade, these newer trends may no longer be considered novel, but they’re on the cusp of becoming as familiar and significant as their predecessors.
Digital reality technologies, including AR/VR, mixed reality, voice interfaces, speech recognition, ambient computing, 360° video, and immersive technologies, promote more natural user engagement by seamlessly extending a human-centric experience beyond the confines of keyboards and screens. The goal is natural, intuitive, and potentially imperceptible interactions with underlying technologies. Digital Commercial applications of digital reality are growing.9 For example, as discussed in reality human experience platforms, many companies are using digital reality technologies to deepen emotional connections and empathy among customers and employees. And in digital twins, we see how digital reality can help bring the digital twin to life. Using AR, a manufacturer can provide its workers with a view into 3D content from a digital twin, improving worker productivity.10
Cognitive technologies, such as machine learning, neural networks, robotic process automation, bots, natural language processing, neural nets, and the broader domain of AI, have the potential to transform nearly every industry. These technologies personalize and contextualize the human-technology interaction, allowing businesses to provide tailored language- and image-based information and services, with minimal or no human involvement.
Cognitive Demand for cognitive technologies is skyrocketing—IDC forecasts spending to reach US$77.6 billion in 202211—although their potential benefits are accompanied by significant trust and tech ethics considerations. As we discuss inethical technology and trust, a company can help build a reputation as a trusted global brand by being transparent about the use of cognitive technologies, evaluating the impact on customer trust, and proactively seeking to understand and mitigate the effects on customers and their data.
Blockchain is a critical technology priority for more than half of those who participated in Deloitte’s 2019 Global Blockchain Survey, a 10-point increase from 2018. Eighty-three percent could identify compelling blockchain use cases, a 9-point increase from the previous year. Results suggest that in 2019, the topic of enterprise blockchain discussions shifted from, “Will blockchain work?” to, “How can we make blockchain work for us?”12
Blockchain Financial services and fintech companies continue to lead blockchain development, but other sectors—notably, government, life sciences and health care, and technology, media, and telecommunications—are also advancing blockchain initiatives.13 Similar to cloud, our architecture awakens trend discusses how blockchain provides architects with an opportunity to do bold new things, disrupting the status quo as they work on multidisciplinary teams to help achieve business outcomes.
11 Tech Trends 2020
Foundation
The business of technology, risk, and core modernization may seem prosaic and dull, but these forces are undeniably the heart of the business. And companies continue to make considerable investments and advances in these well-established domains. Combined, they provide a reliable, scalable foundation for digital transformation, innovation, and growth, and are a requirement for successful investments in analytics, cognitive, blockchain, and other disruptive technologies.
The business of technology—how IT operates—is evolving as technology and business strategies converge. As companies increasingly look to reengineer IT not only to deliver operational excellence but to partner with business functions to drive value creation, many IT teams are shifting their focus from project delivery to product and business outcomes and adopting collaboration-enabling development The business of methodologies such as Agile and DevOps. technology The supercharged technology function can then help enterprises become more agile in their response to technology-driven market and business changes. In finance and the future of IT, we take a closer look at how new approaches to technology finance are helping fuel business agility. And inarchitecture awakens, we examine how organizations are redefining the architect’s role to cultivate responsiveness to overarching business needs and encourage collaboration with business and end customers.
Risks facing enterprises in an innovation-driven era extend far beyond traditional cyber, regulatory, operational, and financial threats. Participants in the2019 CEO and board risk management survey14 said the top threats to their companies were those related to new disruptive technologies and innovations, ecosystem partners, brand and reputation, and organizational cultures—even as they acknowledged they hadn’t prepared for or invested appropriately to manage these risks. Risk Beyond the essentials of compliance and security, organizations are approaching the broader issue of trust as a corporate strategy driven by the potential risks that emerging technologies could have on products, services, and business goals. Ethical technology and trust examines the broad implications of trust—including ethics and responsibility, privacy and control, transparency and accountability, and security and reliability—on an organization’s people, processes, and technology.
Core modernization reflects the ongoing pressures that digital transformation, user expectations, and data-intensive algorithms put on core systems in the front, mid, and back office. Whether it’s digital finance, a real-time supply chain, or a customer relationship management system, core systems support key business processes. Many CIOs recognize that their legacy systems lack the agility to innovate and scale, Core with 64 percent of CIO survey participants currently rolling out next-generation ERP or modernizing legacy platforms.15 modernization In an era of instantaneous, always-on, tailored interactions, organizations need to lower their overall technical debt. Thoughtful approaches to modernizing the core—reengineering existing legacy systems, refreshing ERP systems, and rewriting systems—are more important than ever. Architecture awakens discusses how technology architects are building on future-forward architectures that leverage new platforms to get the benefits of agility, automation, security, and scalability.
12 Macro technology forces
Emerging forces on the horizon
As the three disruptor forces are gaining ground and are poised to make significant business contributions in the coming decade, three technology developments and innovations—the horizon next—are waiting in the wings. We will begin to feel their impact toward the end of the 2020s.
Ambient experience envisions a future in which technology is simply part of the environment. Computing devices continue to increase in power and shrink in size. These ever-smaller devices are evolving our input from unnatural (pointing, clicking, and swiping) to natural (speaking, gesturing, and thinking) and their interactions from reactive (answering questions) to proactive (making unanticipated suggestions).
As devices become seamless and ubiquitous, they and we are becoming increasingly inseparable. Imagine a future world where tiny, connected, context-aware devices are embedded throughout the office, home, and beyond, functioning as part of the Ambient background. Or neurofeedback technology that today enables game-playing through experience brainwave analysis16 could serve as the foundation for direct brain and neural interaction, allowing us to think a question or request and have an appropriate response or action delivered to our ambient experience. For example, thinking, “I need to leave for the airport in an hour” could trigger a cascade of background activity, including arrangements for automated flight check-in, a virtual boarding pass for biometric screening, a self-driving car programmed to activate at the correct terminal, setting your home smart system to “away,” and halting deliveries for the duration of the trip.
Exponential intelligence will build on today’s cognitive capabilities. Today, machine intelligence can find patterns in data but can’t interpret whether those patterns have inherent sense. It lacks the ability to recognize and respond to the nuances of human interaction and emotion. And it is also very narrow—it can defeat a human chess grandmaster but can’t understand the need to flee from a room on fire. Exponential The future promises more. With semantic and symbolic understanding, machines will intelligence be able to tease out actual causality from spurious correlation. With a combination of technologies from human experience platforms, our virtual assistants will increasingly be able to recognize—and adapt to—our moods. And as researchers make progress at creating broad, not just narrow, expertise, exponential intelligence will be able to move beyond the statistical and computational. It will ultimately lead to more capable AI with, dare we say, personality.
Quantum harnesses the counterintuitive properties of subatomic particles to process information and perform new types of computation, communicate “unhackably,” miniaturize tech, and more. For quantum computing, the special properties of these quantum bits, or qubits, have the potential to create exponential change. By manipulating individual particles, quantum computers will be able to solve certain highly complex problems that are too big and messy for current Quantum supercomputers—from data science to material science. As researchers overcome current technical limitations, quantum computers will increasingly supplement classical computers. Data scientists will be able to scan ever larger volumes of data for correlations; material scientists can use qubits to simulate atoms in ways that are impracticable on classical computers; and fascinating possibilities exist in many other areas including communications, logistics, security and cryptography, energy, and more.
13 Tech Trends 2020
MY TAKE
OHNSON & JOHNSON HELPS people live longer, healthier lives by creating innovative medicines, life- altering medical devices, and trusted consumer products. While there’s no denying that technology Jtouches every aspect of our business, what matters most to our patients and customers is how our products help improve their lives. Technology absolutely plays an important role in getting us there, but it is a means to achieving our greater purpose of improving human health.
Within this context, technology’s potential has always been front and center in some areas of our business, such as R&D. What has changed in the last few years is that now everyone appreciates that technology is an enabler, everywhere in the organization, across lines of business, functions, and our talent pool. Today, the convergence of multiple disruptive technologies is helping us generate more value for our stakeholders by making better JOAQUIN DUATO decisions and working more productively. VICE CHAIRMAN OF THE EXECUTIVE COMMITTEE, First, we’re making better business decisions thanks to data science. Given J&J’s JOHNSON & JOHNSON reach, there is tremendous potential in connecting our data and embedding higher-quality, more efficient, and increasingly predictive decision-making tools across the organization. To do this, we are working cross-functionally to build our data science foundation by understanding what types of data are available, cleaning and engineering it so it can be analyzed more easily, and defining our next-generation data standards and architecture. The results are already impressive. For example, supply chain leaders are using advanced analytics to plan and improve process controls. In addition, R&D depends on data science to advance clinical trials and screen new medicine candidates faster than ever before so we can deliver safe and effective new medicines to patients in need.
We’re also using data science to help doctors make better patient health care decisions. For a hypertension study, J&J scientists collaborated with the Observational Health Data Sciences and Informatics network to perform research on hundreds of millions of patient records within the network’s international database.17 The study included insurance claims data and patient records from 4.9 million patients, making it the most comprehensive study ever on first-line drugs used to reduce hypertension. Rather than conducting single pairwise comparisons of two medicines for a given outcome, as most studies do, data science technologies enabled the team to evaluate 22,000 pairwise comparisons at once. By accelerating the research process, advanced analytics and cognitive technologies can help doctors deliver better patient care.
Second, we’re using intelligent automation—automation technologies combined with artificial intelligence— to give our employees the gift of time. Intelligent automation reduces repetitive and routine work while generating insights that employees can use to improve compliance, quality, and speed. For example, our finance collections team automates routine tasks, giving members more time to engage with customers to resolve disputes. This has led to improved cash flow, increased productivity, greater efficiency, and enhanced job satisfaction.
14 Macro technology forces
Over the past 18 months, we’ve automated nearly 30 global processes affecting 300,000 transactions. We’ve improved business outcomes and quality, while giving back more than 15,000 hours to our teams. And we’ve merely scratched the surface of what’s possible—we intend to scale these solutions across our enterprise.
These overarching initiatives are underpinned by investments in cloud, core modernization, comprehensive cyber risk strategies, and more. Our employees are just like consumers in that they want to have a frictionless experience with technology in their day-to-day lives, so we’re focusing on improving their digital experience wherever we can. We’re simplifying workflow, making processes less complicated, and shifting to modern user-centric designs powered by data science and intelligent automation.
All of this requires an evolved technology organization that works as a strategic partner and not just a service provider. Our technology team’s role is to ensure we apply disruptive technologies in concert to help the organization deliver stronger outcomes, and we’re introducing ways to measure the connection between the function’s performance and the outcomes the business cares about. For example, how can we use metrics to show that R&D is making better decisions because our technology function is delivering cleaner data?
In the same way that the technology organization needs to understand the business outcomes it supports, our executives need to recognize how technology can help them achieve the outcomes they desire. We don’t expect our executives to become programmers, but they should be able to identify how, when, and where technology can help them drive better results. And we want them to develop a dose of healthy skepticism so they can distinguish between hype and technologies likely to deliver lasting outcomes.
We look at technology as an enabler that helps our people progress in their careers, become proactive change agents, and deliver better outcomes. We take a simple view of new and emerging technologies: They are valuable because they help us achieve business results that are meaningful to our patients and customers—and because they help us create a better, healthier world.
15 Tech Trends 2020
MY TAKE
OR NEARLY HALF a century, technology has underpinned critical business and logistics operations on which FedEx customers depend. Almost a decade ago, we committed to an expansive technology Frenewal initiative based on an ongoing vision for cloud and everything-as-a-service. We began a journey to simplify and modernize our monolithic legacy systems by creating a collection of orchestrated microservices.
We’re wrapping up the primary phase of the IT renewal initiative, and it’s nothing less than a complete refactoring of legacy software applications that typically have long development, testing, and deployment cycles. Our new service-oriented, cloud-based model is more value-driven. The technology ROB CARTER team orchestrates software functions as interoperable microservices that can EVP AND CIO, FEDEX be used across multiple platforms. They are smaller, incremental, and modular, with iterative delivery cycles that enable us to rapidly adapt to ever-changing business circumstances and help us remain in alignment with our customers as they adopt API- and service-driven architectures and workflows.
As the Internet of Things, advanced analytics, and blockchain emerged, we were able to leverage them to sustainably develop innovative new products and services for our customers. We’ve been able to position ourselves ahead of the curve on these and other emerging technologies. For example, we developed and are testing small, embeddable IoT sensors—each about the size of a pack of gum—that provide drop-in connectivity using Bluetooth Low Energy (BLE) wireless networks. This allows us to dramatically expand the amount of shipment data we collect beyond date, time, and location stamps to include temperature, speed, and a host of other measurements. The application of real-time analytics to the sensor-collected data improves visibility into the transportation network, automatically predicts the flow of shipments, and optimizes delivery routes by dynamically routing shipments to bypass network clog points.
When IoT and analytics are combined with blockchain, they have the potential to improve existing chain- of-custody systems and processes. Embedded IoT sensors can automatically transmit data to a blockchain ledger as a shipment moves from point of supply to point of demand, enabling carriers, regulators, and customers to track the provenance of goods, combat illegal and counterfeit products, and simplify the cross-border shipping process. Ultimately, we expect the impact of these technologies to extend beyond product shipments to the end-to-end life cycle of a product as it moves through the supply chain.
To stay ahead of the innovation curve, we must be responsive, which requires an agile framework that allows us to rapidly and iteratively adapt, deploy, and pivot when the market demands it. For instance, our experiments with sensor-based logistics stretch back more than a decade with the launch of our SenseAware device. Initially, we deployed sensors that relied on cell phone networks, migrating to BLE network technology when it proved more efficient. Large and expensive, the original sensors had to be reclaimed and reused. As IoT capabilities matured and became more cost-effective, we were able to roll out smaller, less expensive sensors at scale.
16 Macro technology forces
We also embrace risk-taking innovation when the potential reward outweighs the risk. For example, we calculated that the cost of experimenting with blockchain and potentially concluding that it wasn’t useful would be a fraction of the cost of not making an early blockchain move at all. Our willingness to take an early risk paid off. As a charter member of the Blockchain Research Institute and current standards chair of the Blockchain in Transport Alliance, we have access to invaluable contacts and resources in the blockchain industry.
We know this is a continuous journey—we can’t ever stop transforming. New competitors are agile and technologically savvy, so we plan to continue to evolve our analytics capabilities and to integrate artificial intelligence into the logistics network. And there are a few more legacy systems whose long tentacles haven’t been fully pried out yet. But because we can’t predict the next innovation or market force, we haven’t locked ourselves into processes, investments, or technologies that aren’t adaptable to future unknowns. I don’t always know what’s coming next, but with an adaptable set of services and the ability to be agile and iterative, I know we’ll be much faster at delivering value.
17 Tech Trends 2020
EXECUTIVE PERSPECTIVES
STRATEGY FINANCE RISK
Many of the disruptive Which macro-level technology The farther we gaze into the opportunities around which disruptions could upend one future of the macro forces and organizations are building their industry and cause value to the disruption they enable, the business and innovation migrate to another? As CFOs more difficult it becomes to strategies are grounded in the examine technology-driven recognize, evaluate, and plan for macro forces discussed in this innovations for opportunities, consequent risks. Today’s risk chapter. To capitalize on this question should be top of assumptions will quickly dissolve changing technology forces and mind. In the last 20 years, for into a fog of ambiguities and become undisruptable, CEOs example, disruptive innovations unknowns that do not fit neatly need to become “masters of have driven value away from into the chief risk officer’s green, disruptive jujitsu.”18 They should established advertising and retail yellow, and red stoplight charts. identify potential disruptions, players, toward tech startups How, then, can companies better organize appropriate component with dynamic new models, and understand the technology risks responses, and hijack the trends onward to social media platforms that lie ahead? First, by deploying for their own competitive attracting advertising and advanced cognitive risk sensing advantage. To do so, CEOs can marketing dollars. It is finance’s and predictive risk intelligence work with tech executives and job to anticipate how emerging tools that continuously scan the their teams who are identifying trends could alter where and digitalized risk landscape for emerging technology and how companies may make relevant information.20 Similarly, operating on the front lines of money in the future, and who by applying AI capabilities— the digital revolution. At the will own the profit streams. As a including data mining, machine same time, it falls to the CEO— result, CFOs and their teams learning, and natural language particularly those in incumbent should strive to become more processing—to unstructured organizations—to strike an fluent in enterprise technology. data, they can identify risk ambidextrous balance between With a vision of the future in indicators that humans and “protecting the fortress” and mind and a deeper traditional analytics often miss.21 embracing disruptive technology. understanding of disruptive But these steps alone are not Stability is important, but given technologies and their enough to bring the future into the pace of technology-driven possibilities, CFOs and their focus. Going forward, CIOs disruption, few can afford to teams can then develop should help risk and business focus solely on the short term. strategies for competing in a leaders develop a more nuanced The time to invest in the next brave new ecosystem. understanding of the role macro generation of macro force forces play in their company’s innovations is now. As such, future. This will help them think CEOs expect CIOs to become beyond traditional stoplight chart insightful strategists and futurists reporting and develop new who can help their peers connect approaches for identifying and the realities of today with the managing only the most relevant possibilities of tomorrow.19 risks ahead.
18 Macro technology forces
NINE SHIFTS HELP DELIVER ON THE PROMISE OF THE MACRO FORCES Nine shifts can help businesses organize effectively and upgrade their innovation chops to realize the collective benefits of the macro forces.22 Each of these interconnected shifts influences the others; applying them in concert can help businesses achieve the most effective outcomes.
• Agility and speed. Agile • Future workforce. As • Digital transition. Every capabilities, organizational traditional IT tasks and company’s transition from design, culture, work style, capabilities disappear, digital experience to digital funding, governance, and businesses seek talent with reality will have a different sourcing can help companies new technical skill sets and focus, type of leader, innovate rapidly. soft skills. and structure.
• Innovation and • Governance and funding. • Data organization. Data- ecosystems. A radar for Leaders can consider making focused organizations disruptive technologies, an governance and funding extend the focus of analytics innovation ecosystem, and a changes that support from operational efficiency pipeline of ideas can enable technology innovation and a and risk management to continual innovation. product-centric focus. value creation.
• Blurred internal • Leadership and culture. • Cloud adoption. Adopting boundaries. Embedding Leadership skills and a the cloud typically shrinks the technologists in business supportive culture can centralized IT organization functions can extend help companies recruit, and promotes value technology funding and develop, and inspire the cocreation in addition to accountability deeper into technology workforce. operational excellence. the business.
Build wisely: The macro macro forces come together to set the stage for a forces in concert new disruption. Take, for example, digital twin technology. Over the course of the last decade, In and of themselves, none of the macro forces advances in cloud, analytics, cognitive technologies, is sufficient. But like instruments in a symphony, and digital reality have combined with digital the macro forces, working in concert, can lead design and manufacturing system advancements to innovative new business models, new sources to make it easier to integrate data from multiple of business value, and systems, software platforms, applications and transformed business hardware. Now organizations across industries operations. can use digital twins to optimize processes, make data-driven decisions in real time, and create new In our exploration of these products, services, and business models. macro forces over the last decade, perhaps our most Leading organizations are proactively engineering significant finding was that the most effective a controlled collision of these macro technology organizations are combining multiple trends. For forces to create a solid foundation for innovation each of our 2020 trends, we highlight how multiple that can propel their business into the future.
19 Tech Trends 2020
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How is your business integrating the adoption of emerging technologies with business strategy? 1 CIO INSIDER SERIES
Navigate the evolving tech landscape with actionable business insights, technical How many, and which, macro knowledge, and research. technology forces do you believe provide the strongest backbone 2 for future innovation in your business?
2019 FUTURE OF CYBER SURVEY Which time horizon does your
organization’s technology strategy The future of cyber survey 2019 LearnCyber everywhere. how Succeed executives anywhere. are 3 currently address? embracing integrated cyber strategies that empower business growth.
BOTTOM LINE STATE OF AI IN THE Nine macro forces will continue to shape future business ENTERPRISE and technology strategies, IT operations and investments, business models, and markets. Together, they’re clearing Gain insights on how a path for three new forces that could render our world organizations are adopting unrecognizable by the next decade. Our challenge is to organize and benefiting from the enterprise to navigate the macro forces from experience cognitive computing/AI. to digital reality, analytics to cognitive, and cloud to blockchain to deliver on the combined promise that these forces hold.
20 Macro technology forces
Authors
BILL BRIGGS is a principal with Deloitte Consulting LLP and is the global chief technology officer. With more than 20 years of experience, he helps clients anticipate the impact that emerging technologies may have on their businesses in the future, and how to get there from the realities of today. He also helps define the vision and incubate the future of Deloitte Consulting LLP’s evolving technology services and offerings. Briggs serves as executive sponsor of Deloitte’s CIO Program, offering CIOs and other IT executives insights on how to navigate the complex challenges they face in business and technology.
SCOTT BUCHHOLZ is a managing director with Deloitte Consulting LLP and serves as the Government and Public Services chief technology officer and the national Emerging Tech Research director. A leader and visionary with more than 25 years’ experience, he advises clients on how to navigate the future using existing and emerging technologies. Buchholz also leads Deloitte’s efforts to incubate nascent technology offerings.
SANDEEP SHARMA is the deputy chief technology officer and managing director in the Strategy and Analytics practice with Deloitte Consulting LLP. He has a doctorate in real-time analytics and is a data scientist with more than 23 years of global experience, focusing on the future of analytics, artificial intelligence, digital workforce, and data modernization programs. Sharma works in a variety of industries, helping our clients to become Al-enabled, insight-driven organizations.
SENIOR CONTRIBUTORS
Andries van Dijk Hans van Grieken Director Independent adviser Deloitte Consulting B.V. Deloitte MCS Limited
Nicholas Reed Senior manager Deloitte MCS Limited
21 Tech Trends 2020
Endnotes
1. Deloitte Insights, Tech Trends 2019, 2019.
2. Bill Briggs et al., Industrializing innovation: 2018 global CIO survey, chapter 6, Deloitte Insights, August 8, 2018.
3. Angel Vaccaro et al., Beyond marketing: Experience reimagined, Deloitte Insights, January 16, 2019.
4. Briggs et al., Industrializing innovation.
5. Ibid.
6. Bill Briggs et al., Strengthen the core: 2018 global CIO survey, chapter 5, Deloitte Insights, August 8, 2018.
7. George Collins et al., Everything-as-a-service: Modernizing the core through a services lens, Deloitte Insights, February 7, 2017.
8. Jeff Borker, “What is hyperscale?,” Digital Realty, November 15, 2017.
9. International Data Corporation, “Worldwide spending on augmented and virtual reality expected to surpass $20 billion in 2019, according to IDC,” December 6, 2018.
10. Jonathan Lang, “AR & digital twin technologies are a powerful combination,” PTC, July 8, 2019.
11. International Data Corporation, “Worldwide spending on cognitive and artificial intelligence systems forecast to reach $77.6 billion in 2022, according to new IDC spending guide,” September 19, 2018.
12. Linda Pawczuk, Rob Massey, and Jonathan Holdowsky, Deloitte’s 2019 Global Blockchain Survey, Deloitte Insights, May 6, 2019.
13. Ibid.
14. Deloitte, CEO and board risk management survey, accessed January 2, 2020.
15. Briggs et al., Strengthen the core.
16. Ruqayyah Moynihan and Johannes Kaufmann, “This video game is operated with your brainwaves and it could help treat anxiety, epilepsy, and ADHD,” Business Insider, November 11, 2018.
22 Macro technology forces
17. Marc A. Suchard et al., “Comprehensive comparative effectiveness and safety of first-line antihypertensive drug classes: A systematic, multinational, large-scale analysis,” The Lancet 394, no. 10211 (2019).
18. Benjamin Finzi et al., Disruptive jiu-jitsu, Deloitte Insights, May 1, 2019.
19. Benjamin Finzi, Vincent Firth, and Mark Lipton, Ambidextrous leadership: Keystone of the undisruptable CEO, Deloitte Insights, October 18, 2018.
20. James Cascone et al., “See around corners with cognitive risk sensing,” Deloitte CIO Journal on the Wall Street Journal, May 28, 2019.
21. Deloitte, “Why cognitive computing is a game changer for risk management,” accessed January 2, 2020.
22. Andries van Dijk and Hans van Grieken, Nine big shifts that will determine your future Business of Technology, Deloitte Insights, September 19, 2019.
23 TREND SUMMARY DEFINITION
e th әl In a time of constant tech disruption, earning trust tech nol o gy is a 3 0-degree challenge—and opportunity. n o erarch ng set of al es that rect an organ at on s a roach to ts se of technologies as a whole and the ways in which they are deployed to drive business.
e elo an a roach to ethical technology that aligns with your organization’s Proactively evaluate how general compliance and BY THE NUMBERS to use technology in a business ethics policies. way that is aligned with your company’s purpose and core values. ology ech t eh l t ol e h c r et r v e cy co o c e t t 55 e l r e Y P e g R G g O u O l L C E t O o S r N S y t H E c S C o of res on ents n a elo tte E T t study from high-growth r
o l companies are highly s concerned about the ethical
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compared to only 27% of
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g v l e l rs s ty u cl o us P E O P L E t s o uc s ec s or o g fr e
us ess of Digital technology e er e ce
Extend responsibility for ethical technology across your company and create a c lt re that emphasizes trust.
Timothy Murphy et al., Ethical technology use in the Fourth Industrial Revolution, Deloitte Insights, July 5, 20 9. Ethical technology and trust
TREND SUMMARY DEFINITION e th әl Ethical technology In a time of constant tech disruption, earning trust tech nol o gy is a 3 0-degree challenge—and opportunity. n o erarch ng set of al es and trust that rect an organ at on s a roach to ts se of technologies as a whole and Applying your company’s the ways in which they are deployed to drive business. values to technology,
e elo an a roach people, and processes to ethical technology that aligns with your organization’s Proactively evaluate how general compliance and BY THE NUMBERS to use technology in a business ethics policies. way that is aligned with COMMON REFRAIN in Deloitte’s Tech Trends reports is your company’s purpose that every company is now a technology company. With the and core values. ology ech t eh l t ol e advent of digital technology, businesses have been asking h c r et r v A e cy customers to trust them in new and deeper ways, from asking for co personal information to tracking online behavior through digital o c e t t breadcrumbs. At the same time, headlines regularly chronicle 55 e l technology-based issues such as security hacks, inappropriate r e Y P e g R G g O u or illegal surveillance, misuse of personal data, spread of O l L C E t O o misinformation, algorithmic bias, and lack of transparency. The S r N S y t H E distrust these incidents breed in stakeholders—whether customers, c S C o of res on ents n a elo tte E employees, partners, investors, or regulators—can significantly T t study from high-growth r o 1 l companies are highly damage an organization’s reputation. Indeed, consumer trust in s concerned about the ethical commercial enterprises is declining, citizens are becoming wary of
y g ramifications of technologies,
T public institutions, and workers are asking employers to explicitly
e TRUST
r
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compared to only 27% of 2
r state their core values. t
s
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low-growth companies.
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In what we recognize as an emerging trend, some companies r
c
e y
b are approaching trust not as a compliance or public relations y
issue but as a business-critical goal to be pursued—one that TREND BREAKDOWN can differentiate them in an increasingly complex and overfilled
g market. As discussed in Deloitte’s 2020 Global Marketing Trends v l e l report, brand trust is more important than ever for businesses— rs s ty u and it’s all-encompassing. Customers, regulators, and the media cl o expect brands to be open, honest, and consistent across all aspects us P E O P L E t s o uc of their business, from products and promotions to workforce e s c s or 3 o g fr e culture and partner relationships.
us ess of Digital technology e er e ce Every aspect of a company that is disrupted by technology represents an opportunity to gain or lose trust with customers, Extend responsibility for ethical technology employees, partners, investors, and/or regulators. Leaders across your company and who embed organizational values and the principles of ethical create a c lt re that technology across their organizations are demonstrating a emphasizes trust.
Timothy Murphy et al., Ethical technology use in the Fourth Industrial Revolution, 25 Deloitte Insights, July 5, 20 9. Tech Trends 2020
commitment to “doing good” that can build a organization’s leaders spend enough time thinking long-term foundation of trust with stakeholders. In about and communicating the impact of digital this light, trust becomes a 360-degree undertaking initiatives on society. While respondents from to help ensure that an organization’s technology, digitally maturing companies are the most likely processes, and people are working in concert to to say their leaders are doing enough, even then, maintain that foundation. the percentage barely breaks into a majority, at 57 percent.5 As the adage reminds us, trust is hard to gain and easy to lose. These findings suggest that organizations still have significant room to step into the lead. Those companies that develop an ethical technology The ethical technology terrain mindset—demonstrating a commitment to ethical decision-making and promoting a culture that The term ethical technology refers to an supports it—have an opportunity to earn the trust overarching set of values that is not limited of their stakeholders. to or focused on any one technology, instead addressing the organization’s approach to its use of technologies as a whole and the ways in In pursuit of trust which they are deployed to drive business strategy and operations.4 Companies should consider In the digital era, trust is a complex issue fraught proactively evaluating how they can use technology with myriad existential threats to the enterprise. in ways that are aligned with their fundamental And while disruptive technologies are often viewed purpose and core values. as vehicles for exponential growth, tech alone can’t build long-term trust. For this reason, leading Ethical technology policies do not replace general organizations are taking a 360-degree approach to compliance or business ethics, but they should all maintain the high level of trust their stakeholders connect in some way. Just as your approach to expect. cybersecurity hasn’t taken the place of your company’s more general privacy policies, your IN TECHNOLOGY WE TRUST ethical technology approach should complement Artificial intelligence (AI), machine learning, your overall approach to ethics and serve as its blockchain, digital reality, and other emerging logical extension in the digital realm. Some technologies are integrating into our everyday lives companies are expanding the mission of existing more quickly and deeply than ever. How can ethics, learning, and inclusion to include ethical businesses create trust with the technologies their technology, while maintaining separate technology customers, partners, and employees are using? ethics programs. Doing so helps keep technology ethics top of mind across the organization and • Encode your company’s values. With encourages executives to consider the distinctions technology ingrained in the business and between technology-related ethical issues and machine learning driving business decisions broader corporate and professional ethics and actions, an organization’s values should be concerns. encoded and measured within its technology solutions. Digital systems can be designed to The fifth annual study of digital business by MIT reduce bias and enable organizations to operate Sloan Management Review and Deloitte found in line with their principles.6 For instance, a that just 35 percent of respondents believe their city government worked with policy institutes
26 Ethical technology and trust
to develop an algorithm toolkit intended to of time focusing on cyber issues, and rightly identify ways to minimize unintended harm to so. Cyber defenses represent your commitment constituents by limiting biases in the criminal to protect your customers, employees, and justice system and other institutions. business partners from those who do not share their values—or yours. Cyber risk strategy Safeguards can promote stakeholder welfare should be built and managed from the ground by helping prevent users from engaging with up, embedded in the business mindset, technology in unhealthy or irresponsible ways. strategy, and policies, not only within IT. Examples include a company that imposes time Business leaders can collaborate with IT to and spending limits on habit-forming games, create a comprehensive cyber risk strategy— a content aggregator that prompts users to be encompassing security, privacy, integrity, and skeptical about the veracity of crowdsourced confidentiality—to help build stakeholder trust information, and cloud computing providers and drive competitive advantage. This requires that automatically issue alerts before customers considering the organization’s risk tolerance, go over budget. identifying the most vulnerable gaps as well as the most valuable data and systems, then Explainable AI technologies can clarify how devising plans for mitigation and recovery. AI-driven decisions are made. For instance, to enhance confidence in AI-supported WHAT’S IN A PROCESS medical diagnoses, health care companies are A strong foundation for ethical technology and developing solutions that assign each diagnosis trust will be shaped by the principles of an a confidence score that explains the probability organization’s leaders and realized in business and contribution of each patient symptom processes. (vital signs, signals from medical reports, lifestyle traits, etc.) to that diagnosis. Clinical • Respect stakeholder privacy. One of professionals can see why the conclusion was technology disruption’s most overarching made and make a different one if required.7 effects has been to accelerate the collection, analysis, and dissemination of information. • Build a strong data foundation. Without Not so long ago, the transactional details of methodically and consistently tracking what our lives were kept in physical file cabinets, data you have, where it lives, and who can pulled out and referenced for specific needs. access it, you cannot create an environment Today, systems routinely collect these details of trust. A strong data foundation unifies and combine them with our purchase histories, stakeholders around a single vision of posts on social media, online searches, and data accountability and delivers on secure even the route we drive to work each day.10 If technology that supports effective data consumers have reason to believe their data management.8 Leaders should aim to give is being used in ways they don’t approve of, stakeholders some control over how their reactions can include calls for boycotts, public data will be used and delete data on demand inquiries, and even severe penalties under strict unless it’s necessary to keep it for legal or regulations, such as the European Union’s regulatory purposes. General Data Protection Regulation and California’s Consumer Privacy Act. Companies • Harden your defenses. Deloitte’s 2019 should create data privacy policies that build, Future of Cyber Survey9 reveals that executives rather than erode, public trust. A natural first are increasingly spending significant amounts step can be to ensure the data usage aligns
27 Tech Trends 2020
with the company mission.11 For instance, cooperation with law enforcement is routine in JD Wetherspoon, a pub company servicing many countries but perhaps unwise in places the United Kingdom and Ireland, recently with rampant corruption or lack of protection deleted more than 656,000 customer email for political or religious rights. Some countries addresses, since it perceived the emails as an have very specific regulations around gaining intrusive approach to customer interaction explicit customer consent to data usage; other that provides little value.12 This case highlights municipalities are passing legislation, such the importance of not only aligning data as banning facial recognition technology, collection and usage to a company’s values but, that can conflict with other rulings. Effective by extension, supporting the company’s trust governance of emerging technologies requires relationship with the customer. all relevant stakeholders—industry, consumers, businesses, governments, academia, and • Be transparent. Companies can build society—to work together. Businesses can trust with stakeholders by proactively and play a key role in helping governments as they transparently demonstrating good behavior. develop laws and standards that increase the “Transparency becomes vital and important,” reliability of emerging technologies16—frank, says AI Global executive director Ashley candid discourse about new technologies, for Casovan.13 “Whether or not people are example, could lead to new rules and guidance interested in seeing the resources and data concerning matters of privacy, transparency, behind it doesn’t really matter. Simply knowing inclusivity, accessibility, inequality, and more.17 that companies have transparent policies provides more confidence that they are doing EMPOWER THE PEOPLE the right thing.” Transparency extends beyond Since technology is arguably used by most if not all policies explaining data collection and usage individuals within an organization, ethical tech- practices. For instance, rather than masquerade nology and trust is a topic that touches everyone. as humans, intelligent agents or chatbots should identify themselves as such. Companies • Deploy the power of all. Companies can should disclose the use of automated waste time and money creating something decision systems that affect customers14 and that excludes a customer group or providing a should stay focused on the customer when service with undesirable side effects. Perhaps problems occur, providing both speed and even worse, they may build solutions that quality in response. The fallout from negative undermine customer trust. Often, design incidents need not include customer loss or dilemmas begin with a homogeneous group reputation-damaging headlines.15 of people designing products, processes, or services without thinking through how other • Respect differing cultural norms. An groups of people might be affected. Leading organization’s overall approach to building companies are changing this dynamic by trust is informed by interests, experiences, creating teams and roles that reflect their and professional standards as well as societal diverse customer base and bringing in multiple norms and government controls. It can be viewpoints from different industries, economic challenging to serve a global market in which backgrounds, educational experiences, genders, expectations on government surveillance or and ethnic backgrounds.18 A 2013 Harvard law enforcement cooperation vary widely. For survey revealed that organizations with example, what is expected surveillance in some leadership teams that have a combination of at countries might seem outrageous elsewhere; least three inherent (ones you are born with)
28 Ethical technology and trust
and three acquired (ones you gain through 360 degrees of opportunity experience) diversity traits out-innovate and outperform the others; these organizations Companies that don’t consider technology to be are 45 percent more likely to report growth their core business may assume that these in market share and 70 percent more likely to considerations are largely irrelevant. In truth, no report capturing a new market.19 matter the industry or geography, most organizations are increasingly reliant on advanced • Teach them to fish. Training technologists digital and physical technologies to run their to recognize their own biases, and to eliminate day-to-day operations. bias in the products they create is an important step toward creating a culture that emphasizes While there is so much emphasis on the challenges trust. But it is only one step. Building awareness disruptive technologies bring and the existential of how technology affects stakeholder trust in threats to an organization’s reputation when those not directly involved or responsible for technology isn’t handled correctly—whether technology and creating associated decision- through misfeasance or malfeasance—these same making frameworks are additional steps disruptive technologies can be used to increase organizations should consider. This is especially transparency, harden security, boost data privacy, important in non–digital native organizations, and ultimately bolster an organization’s position where the ripple effects of day-to-day uses of trust. of technology may be less obvious to leaders and teams. Companies should consider For example, organizations can pivot what resources may be needed to help their personalization algorithms to provide relevant employees recognize ethical dilemmas, evaluate recommendations based on circumstance—for alternatives, and make (and test) ethical example, offer an umbrella on a rainy day rather technology decisions.20 than an umbrella after someone buys a raincoat. By focusing on relevance rather than personalization, • Give employees a reason to trust. AI recommendations are likely to seem more Much of the anxiety over AI and other helpful than invasive.23 advanced technologies stems from the fear of the displacement of labor. From an ethical Deloitte surveys have found a positive correlation perspective, this presents business leaders between organizations that strongly consider the with a challenge: balancing the best interests ethics of Industry 4.0 technologies and company of the business, the employees, and the wider growth rates. For instance, in organizations that community and society. It’s a task made are witnessing low growth (up to 5 percent), only more complex by the fact that advanced 27 percent of the respondents indicated that they technology systems are not self-sufficient. are strongly considering the ethical ramifications of While AI can replace some jobs, for example, these technologies. By contrast, 55 percent of the it creates others that often require specialized respondents from companies growing at a rate of skills and training.21 Companies can build 10 percent or more are highly concerned about trust with employees by advising them how ethical considerations.24 technology may affect their jobs in the future. This could include retraining workers whose After all, the pursuit of trust is not just a roles may evolve and who will likely work with 360-degree challenge. It is also a 360-degree automated systems.22 opportunity.
29 Tech Trends 2020
LESSONS FROM THE FRONT LINES A healthy foundation for trust
ISRUPTIONS IN THE health care industry— patients at scale,” he says. “But it also has the including new care delivery models, potential to cause damage at scale.” Dconsumer demand for digital experiences, declining reimbursements, and growing For example, data analytics, AI, and machine regulatory pressures—are driving many health learning can help researchers and clinicians care organizations to use technology to improve predict chronic disease risk and arrange early efficiency, cut costs, and improve patient care. And interventions, monitor patient symptoms and there could be an inadvertent benefit: Technology receive alerts if interventions are needed, estimate could help health care systems build trust with patient costs more accurately, reduce unnecessary patients and providers. care, and allocate personnel and resources more efficiently. When patients understand Providence St. Joseph Health (PSJH) is leveraging these benefits, they’re generally willing to share technology to adhere to its mission of improving their personal and health information with care the health of underprivileged and underserved providers. But their trust could diminish—or populations, says B.J. Moore, CIO of PSJH.25 vanish—if weak data security or governance Technology is helping the Catholic not-for-profit protocols were to result in a data breach or health system simplify complex experiences unauthorized use of private health information. to enhance caregiver and patient interactions, This could cause patients to conceal information modernize the operating environment and business from care professionals, lose confidence in processes, and innovate with cloud, data analytics, diagnoses, or ignore treatment recommendations. AI, and other technologies to help improve patient care. Technological breakthroughs In the process, PSJH is building trust. For example, the organization is collaborating with can increase trust—but technology partners to standardize cloud platforms careless deployment and and productivity and collaboration tools across its 51 hospitals and 1,085 clinics, a move that negligence can quickly will improve provider and patient engagement erode it. and enable data-driven clinical and operational decision-making. It also aims to develop the first blockchain-powered integrated provider-payer A number of industry regulations help ensure claims processing system. Such technological patient privacy and safety, and PSJH has another breakthroughs can increase trust—but careless effective governance and oversight mechanism: deployment and negligence can quickly erode a council of sponsors, consisting of clergy and it. That’s why Moore has doubled down on laypeople, that holds moral accountability for establishing and maintaining a solid technology PSJH’s actions in service of its mission. Sponsors foundation for innovation and, by extension, trust. help develop guidelines that ensure adherence to “Technology holds so much promise for helping mission and values and advise the organization’s
30 Ethical technology and trust
executive leadership and board of trustees on trust- says. “Educating and communicating with patients, related technology matters, such as the ethical use care professionals, regulatory bodies, and other key of data and the impact of technology on employees stakeholders can help prevent potential barriers and caregivers. to rapid experimentation and innovation and allow us—and our patients—to fully experience the “We’re continuously working to raise awareness benefits of technology.” of technology’s role in improving health,” Moore
Do what’s right: CIBC’s strategic approach to building trust and engagement
IBC IS USING technology to understand With the strategy in place, the next step was to and anticipate individual client needs with build an AI governance process to ensure that Cthe goal of delivering highly personalized new technology projects comply with the strategy experiences—an initiative they call Clientnomics™. and guiding principles. When a new project is Terry Hickey,26 CIBC’s chief analytics officer, proposed, stakeholders answer a series of questions recognized that AI-based algorithms could deliver that help them plan and document what they want the client insights required to drive Clientnomics to accomplish. These questions cover a broad range but that to be successful, leaders needed to of ethical considerations, including project goals, understand and share with employees how AI will possible inherent biases, and client permissions. complement and support the work they’re doing, Approved project documents are stored in a versus replacing their jobs. The bank also needed centralized library that regulators, internal to maintain clients’ trust by protecting their data auditors, and other reviewers can reference to and governing its use. explain the thought process behind the algorithm or model. In early 2019, leaders from the bank’s analytics, risk, and corporate strategy teams collaborated to CIBC has also developed advanced analytic develop an organizationwide AI strategy, which techniques to help govern its use of data—for CIBC’s senior executive committee and board of instance, encoding client data in a way that it directors approved. At the heart of the strategy are cannot be reverse-engineered to identify an guiding principles that address questions such as: individual. The analytics team also devised a way to When will we use the technology? When will we assign a data veracity score—based on data quality not use it? How do we ensure that that we have and integrity, possible bias, ambiguity, timeliness, our clients’ permission? and relevance—to each piece of information that could be used by an algorithm. The algorithmic To reinforce employee trust, the strategic plan models are designed to recognize and treat the data stated that a primary purpose of AI would be veracity appropriately, supporting more reliable, to augment employees’ capabilities to achieve trustworthy, and engaging interactions. company goals. Leaders agreed to focus on funding AI use cases that support employees in their roles As the analytics team launches Clientnomics, and improve practices that aren’t currently members are focused on developing customized optimized. AI-supported client experiences rather than
31 Tech Trends 2020
large-scale technology projects. So far, they have “In my previous role,” Hickey says, “I spent a accumulated 147 use cases, completing 40 in the lot of time with organizations around the world. first year. Everyone talked about the benefits and future potential of AI, and some completed proofs-of- For example, when a client calls CIBC’s contact concept, but few were able to implement them, center, a predictive model dynamically configures especially in banking and finance. By proactively the interactive voice response menu based on the addressing how we will—and will not—use client’s recent transactions and offers the most technology, CIBC has embraced the positive relevant information at the top of the menu. The benefits it can deliver to employees and clients. bank aims to cement client relationships over All of this in less than a year.” time with a continuous string of personalized interactions.
Trust encoded in Abbott’s DNA
N THE HEALTH care industry, trust is a primary diagnose heart attacks.29 To safeguard patient driver of patient behavior: Trusted organizations data and privacy—a core facet of trust—Abbott Ihave an edge in influencing behaviors that has enacted a number of enterprisewide policies, can create more positive health outcomes. For procedures, and annual employee training and 130-year-old global health care company Abbott, certification programs related to data handling and trust is top of mind as it evolves and expands its protection and compliance with national and global portfolio of diagnostic products, medical devices, regulatory mandates. Leaders have also made nutritionals, and branded generic medicines, says significant investments in cybersecurity capabilities CMO Melissa Brotz.27 and controls embedded into product designs, which is increasingly critical for a company such With technology-driven products such as sensor- as Abbott, with products and services that are based glucose monitoring systems, smartphone- heavily connected and integrated—often with other connected insertable cardiac monitors,and products, systems, and apps. cloud-connected implantable defibrillators and pacemakers, Abbott takes a multifaceted approach In addition, ensuring patient trust is a to trust, adds CIO Mark Murphy.28 Across the responsibility that falls to each of Abbott’s 103,000 enterprise and its connected technologies, this employees, from the board of directors and C-suite includes comprehensive data protection policies, leadership to researchers, product designers, and employee training programs, and an external engineers. Company leadership, for instance, is ecosystem of trust-based partners, and other involved in data and product security oversight components. groups and board subcommittees, while employees participate in rigorous education programs on For example, Abbott is exploring multiple data- the implications of data privacy, security, and enabled opportunities to improve health care, transparency. “Abbott is focused on helping people such as a machine learning solution that combines live better, healthier lives,” Murphy notes. “Often, performance data from the company’s diagnostics technology is the enabler to help us do that, but it platforms with global clinical and patient always starts with the patient. We know that when demographic data to help health care providers we build technology, we are doing so on behalf of
32 Ethical technology and trust
the person who wears it, accesses it, or lives with it Ultimately, Brotz says, data-enabled technologies inside their body. And that means we must protect that help people live better lives are an extension it—securely and responsibly.” of the lifesaving products and services that patients
Abbott also relies on a strong external ecosystem to “We know that when we maintain patient trust. Independent third parties and research groups test Abbott’s products and build technology, we are services and assess their vulnerabilities on an ongoing basis. For example, the company is part doing so on behalf of of the #WeHeartHackers initiative, a collaboration the person who wears between the medical device and security research communities that seeks to improve medical device it, accesses it, or lives security. At a recent event, Abbott teamed with with it inside their body. university researchers to build a mock immersive hospital that enabled researchers to practice And that means we cybersecurity defense techniques.30 must protect it—securely Rounding out Abbott’s trust ecosystem are patients and responsibly.” and care providers themselves. To learn what concepts such as trust, security, and privacy mean and their care providers have trusted for 130 years. to the different users of its products and services, “Patients place the highest levels of trust in us, and the company regularly holds focus groups with we take it very seriously,” she says. “It’s part of our them and produces educational material to raise DNA. Our greatest responsibility is to keep them awareness of these issues. and their data safe and secure.”
Rebuilding security from the ground up to maintain customer trust
ECAUSE A COMPANY’S approach to A decade ago, as Google moved internal technology directly affects stakeholder applications and resources to the cloud, its security Btrust in its brand, businesses that are perimeter was constantly expanding and changing, leveraging advanced technologies can benefit from complicating the defense of its network perimeter. considering the technologies’ impact on ecosystem At the same time, companies were seeing more partners, employees, customers, and other sophisticated attacks by nation-state-sponsored key stakeholders. Strong security controls and hackers, testing the limits of the perimeter-based practices are foundational elements for building model of security. Hence, Google decided to and maintaining stakeholder trust. Recognizing completely overhaul its security approach and the impact of security breaches on customer trust, implement a new security model that turned Google went beyond the expected table stakes the existing industry standard on its head, says by completely redesigning its security model to Sampath Srinivas, Google product management protect enterprise systems and data. director for information security.31
33 Tech Trends 2020
Google security experts could no longer assume encrypts traffic to protect data in transmission, that walling off the network would provide the and acts as a sophisticated rules engine that security required to maintain system integrity determines access rights based on the user and and customer trust. They sought to reinvent the device’s context, such as whether it is fully patched. company’s existing security architecture, since Every access request is subject to authentication, the traditional castle-and-moat model—based authorization, and encryption. To protect against on a secure network perimeter with VPN-based phishing, the company—working with the industry employee access to internal applications—was in the FIDO Alliance standards organization— no longer adequate. The goal: to ensure that developed and deployed a new form of employees could use any corporate application cryptographic hardware two-factor authentication from any location on any device as easily as if they called Security Keys.32 were using Gmail and as safely as if they were in a Google office. Today, Google’s user- and device-centric security workflow allows authorized users to securely work Google embraced the zero-trust concept, an from an untrusted network without the use of a innovative security model that eliminates network- VPN. The user experiences internal applications based trust, Srinivas says, instead applying access as if they were directly on the internet. Employees, controls to applications based on user identity contractors, and other users can have a seamless and the status of their devices, regardless of their user-access experience from any location by network location. simply typing in a web address—a process that dramatically reduces support burden. “To deliver Google’s zero-trust security strategy treats every on our goal of maintaining customer privacy single network request as if it came from the and trust, we had to look beyond the status quo internet. It applies context-aware access policies solutions, innovate, and take risks,” Srinivas says. to clues such as user identity, device attributes, “When we broke with tradition and changed the session information, IP address, and context of way we thought about our security infrastructure, the access request itself, collected in real time by it allowed us to develop a more effective way to a device inventory service. A globally distributed protect data and systems.” reverse proxy server protects the target server,
34 Ethical technology and trust
MY TAKE
HEN I SPEAK with leaders in the corporate world, they often ask for advice on how to build a brand that customers and employees trust. As we talk, I find that some haven’t carefully thought about Wwhat they mean by “trust.” Some define it subjectively, like a warm fuzzy feeling. At the other end of the spectrum, others assume that if a customer is willing to use a service or product, that action alone implies trust. I believe that neither of these definitions is complete nor accurate.
To me, trust is a willingness to make yourself vulnerable because you expect the broader system to act in ways that support your values and interests. That doesn’t mean that you expect the company will never make a mistake or experience an unintended outcome. Instead, what’s important is that if something goes wrong, you’re confident that the company will take care of it.
This definition applies even if a company’s product isn’t 100 percent reliable. DAVID DANKS, PH.D. PROFESSOR OF PHILOSOPHY For example, I’m more likely to buy from a company I trust, even if its product AND PSYCHOLOGY, CARNEGIE is occasionally unreliable, because I’m confident that if something goes wrong, MELLON UNIVERSITY the company will take care of me and my interests. I’m less likely to buy from a company offering a highly reliable product if I’m concerned that if the unexpected happens, I’ll be left to deal with the consequences on my own.
So how should corporate leaders approach trust? The first step is to think through the relevant values and interests of both the company and its stakeholders. What are the things that matter to customers, users, employees, and shareholders? This question supports a discussion about how the product or service could advance, protect, or impair those stakeholder groups.
The second step is related to design. How can the organization design a product or service that supports or endorses those relevant values? This is where ethics comes in. From my perspective, ethics is about asking two questions: What values should we have? Then, given these values, what shall we do to advance them? Of course, sometimes values conflict, which pushes organizations to think about the problem differently. Can we design the product in such a way that we don’t have to choose? This design approach can generate innovative and trusted products.
It’s impossible to totally avoid unexpected consequences, but leaders who bring together multidisciplinary product teams can improve the odds in their favor. A team made up of people from a variety of backgrounds and cultures—who feel free to openly share their experiences and opinions—can often uncover creative design solutions or potential design issues. But when a conflict in values is unavoidable, leaders must make intelligent, self-aware, deliberate choices. A leader should decide what’s most important to the company— and own it.
Most leaders already know the right action to take if the ultimate goal is to build trust. But some care more about cost reduction. Or increased efficiency. Or speed to market. The list goes on. And that’s fine. Leaders can choose to build things that don’t increase user trust, if they understand why they are making that choice
35 Tech Trends 2020
and are willing to accept the consequences—expected or unexpected. Problems occur when leaders make choices that damage trust without realizing what they are doing.
Another misconception that leaders often have is that being ethical conflicts with being profitable. This is a false dichotomy. Companies have proven that they can produce reliable, powerful, user-friendly—and profitable—products. And while the products may not perform perfectly all the time, trusted companies have ways to monitor and detect problems, as well as methods for addressing issues quickly and effectively.
My dream is that within 20 years, corporate leaders won’t need to ask ethicists or other advisers about human or societal impacts that could result from product design decisions. I hope the answers will be internalized into corporate cultures so that asking questions such as “Are we sure this is a good idea?” is just part of what organizations consistently do.
36 Ethical technology and trust
EXECUTIVE PERSPECTIVES
STRATEGY FINANCE RISK
A company’s brand is, by One of the finance function’s Cyber risk threat vectors have definition, a contract of trust. primary responsibilities is to evolved rapidly, and attacks have Yet in business, brand trust can build and maintain trust among become increasingly erode overnight. CEOs and customers, business partners, sophisticated, deliberate, and C-suite leaders across the and investors. Yet rising unrelenting in nature. Fifty-seven organization can communicate expectations of transparency are percent of companies the importance of trust to their making it more difficult for participating in Deloitte’s 2019 company’s mission and establish finance to meet this Future of Cyber Survey clear ethics guardrails. Indeed, responsibility. Consider this experienced their most recent establishing clear policies for scenario: Using drone-based cyber incidents within the past ethical usage of technology— cameras, analysts identify a two years.33 And the risk isn’t just an important first step in earning potential issue in your company’s that cyber incidents will destroy trust—could benefit their manufacturing or distribution trust in the classical sense. The businesses. Ultimately, individual facilities that your operations opportunity cost of what cyber employees are acting based on team missed. Analysts vulnerabilities can prevent their best understanding and unexpectedly bring up the issue organizations from doing can be awareness of an organization’s on an earnings call. Markets now far greater: The specter of policies and values. This is no expect companies to respond to cybercrime and its fallout can cast small matter. They will be making situations such as this in near a shadow over an organization’s deliberate decisions about trust real time. Failure to do so raises efforts to turn technology to that will manifest in their doubts, which in turn can erode better use, strangling innovation company’s strategy, purpose, market trust. To meet this and slowing digital and market performance. challenge, finance organizations transformation efforts to a crawl. Moreover, if leaders don’t own will likely need to collect more It can also affect the bottom line, the trust and ethics agenda, data from across the enterprise quickly and dramatically. One decisions will be made in a and deploy advanced analytics survey found that 48 percent of diffuse way. CEOs have an that enable real-time reporting. respondents had stopped using opportunity to provide clarity, They can also collaborate with online services that reported data education, and ongoing peers to educate employees on breaches.34 The issues of ethical communication. With the entire the value that ethics and trust technology and trust will steadily enterprise aligned behind the help create. Finally, CFOs will be capture CXO mindshare. CIOs C-suite’s guidelines on ethical able to help their companies have a responsibility to help other technology and trust, CIOs can deliver the kind of detailed, enterprise leaders become more help ensure that tech strategies, accurate, and timely responses tech-savvy and understand the development efforts, and that markets—and the analysts impact their digital strategies cyber approaches support and investors who watch can have on the organization’s those guidelines. them—demand. trust brand.
37 Tech Trends 2020
ARE YOU READY?
LEARN MORE
What is your current position of trust with your employees, customers, partners, shareholders, 1 and community? ACCELERATING DIGITAL INNOVATION INSIDE AND OUT
Learn how digitally On a scale of “What’s ethical mature organizations technology?” to “We understand use ecosystems and the ethical ramifications of our cross-functional team to 2 tech initiatives” to “We have ethical innovate in new ways. technology policies in place,” where does your leadership team rank?
How do you measure each new digital initiative against its alignment to organizational values RESILIENT PODCAST SERIES 3 and impact on stakeholder trust? Listen to this award- winning podcast featuring conversations with leaders who have tackled risk, crises, and disruption.
BOTTOM LINE
Companies who have yet to recognize that disruptive technology can measurably affect—positively or negatively—every facet ETHICAL TECHNOLOGY of a business risk being overshadowed by those competitors USE IN THE FOURTH that make trust a business-critical mission. Leaders should INDUSTRIAL REVOLUTION be thinking about the potential consequences of employing Explore leadership disruptive technologies throughout their organization. To strategies for confronting master the trust equation, what is needed is a cohesive effort ethical issues associated that starts from the very top of an organization: align the use with Industry 4.0 of technology with organizational values, clearly articulate the technologies. policies and guidelines everyone should follow, and embed those policies into the very fabric of an organization.
38 Ethical technology and trust
Authors
CATHERINE BANNISTER is a managing director in Deloitte Services LP and leads performance and development for Deloitte’s professionals. She is also the architect of Deloitte’s Tech Fluency program, which originated in Deloitte Consulting LLP’s Technology practice to develop and cultivate breadth and depth of technical capabilities, as well as Deloitte’s Tech Savvy program, enabling Deloitte professionals to be conversant in disruptive technologies.
DEBORAH GOLDEN is a principal with Deloitte & Touche LLP and the US Deloitte’s US Cyber Risk Services leader. She brings more than 25 years of information technology experience in industries that include government and public services (GPS), life sciences and health care, and financial services to the role, and previously served as Deloitte’s GPS cyber leader, as well as GPS Advisory market offering leader. Golden also serves on Virginia Tech’s Business Information Technology and Masters in Information Technology advisory boards.
SENIOR CONTRIBUTORS
Dan Frank Mariahna Moore Principal Senior manager Deloitte & Touche LLP Deloitte Consulting LLP
Kirsty Hosea Anand Ananthapadmanabhan Partner Manager Deloitte Touche Tohmatsu Deloitte & Touche LLP
Louise Nickson Anu Widyalankara Director Manager Deloitte MCS Limited Deloitte MCS Limited
Dalibor Petrovic Leo Barbaro Partner Consultant Deloitte LLP Deloitte MCS Limited
Yang Chu Senior manager Deloitte & Touche LLP
39 Tech Trends 2020
Endnotes
1. Nancy Albinson, Sam Balaji, and Yang Chu, Building digital trust: Technology can lead the way, Deloitte Insights, September 23, 2019.
2. Edelman, “2019 Edelman Trust Barometer,” January 20, 2019.
3. Diana O’Brien et al., 2020 Global Marketing Trends: Beyond technology to connection, Deloitte Insights, October 15, 2019.
4. Catherine Bannister, Brenna Sniderman, and Natasha Buckley, “Ethical tech: Making ethics a priority in today’s digital organization,” Deloitte Review, January 27, 2020.
5. Gerald C. Kane et al., Accelerating digital innovation inside and out, Deloitte Insights, June 4, 2019.
6. Deloitte, AI ethics: A new imperative for businesses, boards, and C-suites, accessed August 30, 2019.
7. Albinson, Balaji, and Chu, Building digital trust.
8. Cynthia Dwork and Vitaly Feldman, “Privacy-preserving prediction,” Conference on Learning Theory, 2018; David J. Wu, “Fully homomorphic encryption: Cryptography’s holy grail,” March 27, 2015.
9. Deloitte, 2019 future of cyber survey, accessed December 24, 2019.
10. Tracy Kambies et al., Dark analytics: Illuminating opportunities hidden within unstructured data, Deloitte Insights, February 7, 2017; Tiffany Hsu, “They know what you watched last night,”New York Times, October 25, 2019.
11. Diana O’Brien et al., Are you a trust buster or builder?, Deloitte Insights, October 15, 2019.
12. Rowland Manthorpe, “Wetherspoons just deleted its entire customer email database—on purpose,” Wired, July 3, 2017.
13. Ashley Casovan (executive director, AI Global), phone interview with authors, October 4, 2019.
14. David Schatsky et al., Can AI be ethical?, Deloitte Insights, April 17, 2019.
15. Deloitte, Taking a customer-centric approach to a data breach, July 2018.
16. Microsoft, The Future Computed: Artificial Intelligence and Its Role in Society (Microsoft, 2018), p. 64.
17. Deloitte, Ethics in the age of technological disruption: A discussion paper for the 2018 True North Conference, 2018.
18. Kavitha Prabhakar, Kristi Lamar, and Anjali Shaikh, Innovating for all: How CIOs can leverage diverse teams to foster innovation and ethical tech, Deloitte Insights, November 18, 2019.
19. Sylvia Ann Hewlett, Melinda Marshall, and Laura Sherbin, “How diversity can drive innovation,” Harvard Business Review, December 2013.
20. Bannister, Sniderman, and Buckley, “Ethical tech.”
21. Deloitte, Ethics in the age of technological disruption.
22. Mark MacCarthy, “Planning for artificial intelligence’s transformation of 21st Century jobs,”CIO , March 6, 2018; Rachel Louise Ensign, “Bank of America’s workers prepare for the bots,” Wall Street Journal, June 19, 2018; Genpact, “New ways of working with artificial intelligence,” accessed March 27, 2019.
23. O’Brien et al., Are you a trust buster or builder?
24. Timothy Murphy et al., Ethical technology use in the Fourth Industrial Revolution, Deloitte Insights, July 15, 2019.
25. B.J. Moore (CIO, Providence St. Joseph Health), phone interview with authors, October 10, 2019.
40 Ethical technology and trust
26. Terry Hickey (chief analytics officer, CIBC), phone interview with authors, September 16, 2019.
27. Melissa Brotz (CMO, Abbott), phone interview with authors, November 8, 2019.
28. Mark Murphy (CIO, Abbott), phone interview with authors, November 8, 2019.
29. Nicholas Fearn, “Artificial intelligence can help doctors better detect heart attacks,”Forbes , September 10, 2019.
30. Joseph Marks, “The cybersecurity 202: Hackers are going after medical devices—and manufacturers are helping them,” Washington Post, August 8, 2019.
31. Sampath Srinivas (product management director for information security, Google), phone interviewed with authors, November 11, 2019.
32. Eran Feigenbaum, “The key for working smarter, faster and more securely,” G Suite, April 2015.
33. Deloitte, The future of cyber survey 2019.
34. Jason Reed and Jarad Carleton, The global state of online digital trust: A Frost & Sullivan white paper, Frost & Sullivan, 2018.
41 Tech Trends 2020
TREND SUMMAR Y D E F INIT I O N S
IT and finance leaders work together to develop ′ ә synony or ni le the flexible approaches for funding innovation. a ility to res ond grace ully to a need to change and ada t
′ ә
n iterati e incre ental FUN D ING so t are deli ery ethodology INNO V A T I O N A T THE SPEED OF AGILE
B Y THE N UMBER S
C H A I T o e the organi ation N G E W I T H I N to a roduct ocused o erating odel and create a road a or 5 tech in est ents
o s e ect to i le ent C R E A T I I N A N C E V E F E lore o ortunities or gile e s or a si ilar strategic co in est ent flexible IT delivery model to ecosyste su sidies increase res onsi eness car eout lease ac s and hel s ur roader and other odels inno ation a itions
C H A N G E W I T H I N F I N A N C E ailor udgeting unding TREND B R E A K DOW N and re orting rocesses to eet the e ol ing technology needs o the usiness
us ess of tech o o y
I T NEED S F INA NCE NEED S ou ore
ross fu ct o te s ue c cu t o e b e t e es e sur b e ro uct focus sc co tro
ill riggs et al Manifesting legacy: Looking beyond the 42 digital era eloitte nsights ugust Finance and the future of IT
TREND SUMMAR Y D E F INIT I O N S
IT and finance leaders work together to develop ′ ә Finance and the synony or ni le the flexible approaches for funding innovation. a ility to res ond grace ully to future of IT a need to change and ada t
′ ә Funding innovation at
n iterati e incre ental the speed of agile FUN D ING so t are deli ery ethodology INNO V A T I O N A T THE SPEED OF AGILE
B Y THE N UMBER S
LEXIBLE DELIVERY OF emerging technologies to drive business outcomes is fast becoming today’s competitive C H A N I N I T battleground. Deloitte research found that 56 percent of CIOs o e the organi ation G E W I T H F to a roduct ocused expect to implement Agile software development, DevOps, or a o erating odel and similar flexible IT delivery model to increase IT responsiveness1 create a road a or 5 and help spur broader innovation ambitions. tech in est ents
But there is an obstacle currently slowing these efforts, and it is formidable: the sourcing and distribution of funds. IT’s operations o s e ect to i le ent C R E A T I I N A N C E and development processes are becoming nimbler and product- V E F E lore o ortunities or gile e s or a si ilar focused while the finance function continues to budget, fund, and strategic co in est ent flexible IT delivery model to ecosyste su sidies increase res onsi eness report the same way it has for decades. The result: tension between car eout lease ac s and hel s ur roader IT’s needs and finance’s procedures. If left unaddressed, this issue and other odels inno ation a itions could impair the CIO’s innovation agenda and undermine an organization’s strategic goals.
C H A N G E W I T H I N F I N A N C E Nowhere is this tension felt more acutely than in funding strategic ailor udgeting unding TREND B R E A K DOW N and re orting rocesses innovation and transformation agendas, which currently account to eet the e ol ing for a small percentage of IT’s overall budget. (The average IT technology needs department spends 56 percent of its technology budget on o the usiness maintaining business operations and only 18 percent on building 2 us ess of new business capabilities. ) This is especially true for development tech o o y initiatives that emphasize agility and speed. Finance processes are typically still tied to a project mentality, where the fallacy of predicting the future for unique product development (with I T NEED S F INA NCE NEED S ou ore unknown unknowns) is locked into a project plan with associated fixed project funding. Instead an “agile” approach—referring in this ross fu ct o te s ue c cu t o context to a state of being nimble or flexible rather than to Agile e b e t e es e sur b e software development methodology—is capacity funded with a ro uct focus sc co tro focus on maximizing outcomes.
ill riggs et al Manifesting legacy: Looking beyond the digital era eloitte nsights 43 ugust Tech Trends 2020
Moreover, agile initiatives typically feature cross- • Change within IT. The future of the IT functional teams working in iterative sprints. In organization includes structural changes such many companies, this clashes with the finance as organizing resources around products organization’s traditional funding processes, which and outcomes, creating a clear road map are optimized for functionally compartmentalized for foundational tech investments, and teams. The cross-functional teams model hails evolving traditional roles in procurement and from an era that emphasized repetition and scale vendor management. of known and knowable assets, unlike today’s innovation-focused digital age. • Creative funding. Creative funding sources can amplify and accelerate change. CIOs and CFOs can explore opportunities for funding Building distinctive, innovation such as co-investing within and disciplined approaches across their industry, ecosystem subsidies, now can lead to carveout leasebacks, and other models. sustained competitive Unlikely, you say? Convincing your CFO to alter long-standing financial processes may be a hard edges. The time for sell, at least initially. What’s more, external funding CIO-CFO collaboration opportunities may sound promising but could introduce risks that give CFOs pause. on this issue is now. Yet there are strong incentives for both CIOs and Over the next 18 to 24 months, we expect to see CFOs to find ways to reimagine finance to bolster more IT and finance leaders working together to technology’s potential. As more large organizations develop flexible approaches for funding innovation demonstrate agile’s positive impact on speed to at the speed of agile. This does not mean they value, flexibility, and responsiveness to market will replace annual budgeting cycles with a shiny, needs, their competitors will likely launch their unproven alternative. Indeed, balancing fiscal own agile initiatives at speed and scale.3 Building control and appropriate spending with value distinctive, disciplined approaches now can lead to creation and financial results is a nonnegotiable sustained competitive edges. The time for CIO-CFO requirement. There are multiple approaches that collaboration on this issue is now. can help maintain the balance:
• Change within finance.Finance should Money matters explore opportunities to tailor budgeting, funding, and reporting processes to better meet The tension between IT’s funding needs and the business’s evolving needs for its portfolio finance’s long-held processes did not appear of technology investments. This will likely overnight. It has been building slowly over the last include developing new methods for investing decade as cloud and platform technologies steadily across time horizons, accurately measuring disrupted operating models in ways that cause the the somewhat unpredictable long-term value finance function to reevaluate its methods. that products built with agility can generate, and accounting for value in ways that meet As CIOs and CFOs look for ways to better meet accounting and reporting standards. their respective needs in the coming years, there
44 Finance and the future of IT
are three central problems to consider—all of which regular reporting process.5 Clearly, CIOs and trace their roots to the early days of the digital CFOs are not on the same page when it comes revolution. to assessing the value IT delivers.
• Shifting from capex to opex. Transitioning As part of the finance and the future of ITtrend, we from on-site to cloud-based systems involves expect to see more CIOs, CFOs, and their respective shifting a significant amount of spending from teams explore ways to address these and other capital expenses (capex) to operating expenses funding, accounting, and reporting challenges. (opex). In fact, teams will be doing a little bit of capex and opex all the time. The new mantra is “you build it, you run it.” From an accounting Finance transforms capital perspective, short-term opex growth can affect deployment quarterly results, which CFOs must explain to investors and financial analysts.4 CFOs and their organizations can be the arbiters of rapid change, balancing necessary controls and • Measuring elusive ROI. Technology risk management with modernized techniques innovation initiatives are often experiments that for budgeting, deploying funds, and working with fall short of internal rate-of-return expectations technology and business leaders to continuously and may or may not deliver positive returns. monitor and optimize impacts. Some techniques Investments in innovation don’t typically offer include: traditional IT projects’ level of confidence, financially or temporally, so they are often hard • Risk-based portfolio mindset. Many to confidently champion through standard organizations struggle to justify significant governance processes. In some instances, this funds for innovation and disruptive leaves the finance function struggling to develop technologies—the likelihood of failure can an accurate process for tracking ROI long-term. be high, and the upside of success isn’t This challenge becomes more complicated in always straightforward to quantify. Treating tracking fixed budget investments in things investments as a portfolio is important; such as platforms that can be reused over an thoughtfully developing the governance indefinite period. and attributes of the portfolio is more so. Shoehorning prototypes of disruptive • Calculating value delivered. CFOs technologies into classical five-year ROI rigorously track returns on capital and calculations is likely to generate either wildly associated risk models across areas of optimistic valuations or widespread risk investment. But for technology investments, aversion. Treat investing in emerging tech as few organizations show similar discipline in you would buying call options: The CFO and tracking and measuring the magnitude and management team can make measured bets timing of solution value—when CIOs make their while getting information to more confidently own calculations, they may use assumptions guide future investment and mitigate that differ from those typically used by business future risk.6 or finance. In Deloitte’s 2018 Global CIO Survey, 65 percent of respondents said they • Capex versus opex strategy. Every measured the impact of IT investments on technology investment has risks, and those a case-by-case basis, rather than as part of a made in cloud are no different. Because cloud
45 Tech Trends 2020
FI shifts technology investments from the capital Following the money expense to the operating expense column, e oitte a ed ore than o a I moving to cloud too quickly can affect company a out the cha en e of fundin inno ation financials. CIOs and CFOs can work together to ere i hat the aid classify these costs appropriately and assess and Overall, IT budgets are growing optimize the impact of cloud investments. They can also develop strategies for depreciation Budget Budget and capital allocation to offset any impact.7 remained increased The good news is that the capex-versus-opex the same issue may not rattle Wall Street much longer. Deloitte studied how a set of public companies Budget communicated their cloud investments to Wall decreased Street and how analysts responded. The capex/ opex issue did not appear to be a significant consideration in filings, commentary, and However, budget allocations to analyst discussions. In fact, companies may operations consistently dwarf be underselling and underutilizing their those to innovation cloud investments. Analysts appear to be more interested in how cloud adoption can Business Business lead to potential new revenue streams or innovation operations revenue enhancement than in its potential for cost-reduction.8
Incremental • Capacity-based funding. The idea of fixing business IT budgets around explicit capacity, tweaked change annually, is not new. But as technology organizations move from project to product orientation, those teams increasingly represent And the business is not e uipped dedicated multidisciplinary staff from across to accurately measure the the business and IT. Now, “capacity” is tied impact of IT investments directly to customer, market, or supporting value streams. Road maps of growth objectives and investment needs define existing and future funding, measured not in IT-speak SLAs but in outcomes and results aligned directly to business metrics. Instead of annually framing We measure on a We measure with case-by-case basis a financial model projects to earmark access to tech resources, the product team is responsible for continuously assessing and refreshing its performance and priorities, with the ability to scale up or down based on justified changes to nested outcomes and expected key results. Everything will Business leaders We do not measure impact measure impact become more fluid, so finance should start putting processes and governance in place now ource e oitte o a I ur e to accommodate this volatility.9
46 Finance and the future of IT
• Digital foundations. Many of the talent pools), and defining new expectations investments that companies make in and incentives. cloud migration, core modernization, data platforms, and other technologies form a • Foundational “tech for tech” road digital foundation that benefits the entire map. CIOs typically have a piece of their organization. Given the business-critical budget earmarked for IT’s own investment nature of these investments, CIOs and CFOs in the department. Being deliberate about should consider funding them separately from quantifying and explaining the nature of the larger IT budget. More important, they those investments in business terms can win should consider not allocating costs to the over skeptics. Examples include sharing the business and instead providing subsidies for rationale behind core modernization initiatives lines of business or departments participating and showing year-to-year efficiency gains as a in executing the vision. This can protect these result of simplifying, automating, and re- funding streams from indiscriminate budget platforming systems. Coupled with developing cuts or belt-tightening—and distinguish them and maintaining a road map of foundational from spending on core revitalization efforts strategic tech investments, CIOs can set the that, while also foundational, will eventually stage for a much different conversation about wind down.10 IT investment with the CFO, CEO, and board.
• Enablement empowered. Some traditional IT’s call to arms IT roles can be bastions of change, but only with a mindset shift in purpose and remit. Big changes need to happen with the IT Procurement officers and vendor managers organization as well—ideally in the spirit of, if not should move from tactical short-term measures the structure of, drastically improved alignment to becoming architects of creative contracts and and collaboration with the finance organization. ecosystem partnership vehicles. Areas to consider include:
• Product-focused operating model. Outside-in As described above, IT organizations are moving from plan-build-run structures with The digital transformation underway at many associated capabilities to teams oriented around organizations requires additional sources of market-facing products, capabilities, and funding to enable the kinds of changes needed to internal-facing, shared service value streams. keep disruptive competitors at bay. As part of the These teams bring together disciplines across finance and the future of ITtrend, we expect to tech and business silos, typically use Agile see more CIOs, CFOs, and their respective teams methods and tools, and tend to inspire different explore the following: mindsets while requiring different skill sets. Without trivializing the challenge in reorienting • Vendor subsidy programs. A growing every part of IT’s portfolio along these lines, number of cloud and platform-as-a-service the talent realities are often the biggest hurdle. vendors are creating subsidy programs Having a vision for the future of work within the that offer credits, free trials, and “always organization is needed: identifying the required free” limited usage on select products to skill sets, how they can be sourced (for example, new customers that commit to fixed-term reskilling existing resources or tapping new subscriptions (usually 12 months). Though
47 Tech Trends 2020
many of these programs target smaller Let the funding begin companies, vendors are beginning to offer large enterprise-level subsidy programs with In its simplest form, the Agile software negotiable terms. development boom is a decades-old, IT-centric construct that, after years of evolving, now offers • Co-investment and industry consortia. the business and IT an opportunity to work CIOs and CFOs can explore opportunities to together more effectively and efficiently. The co-invest within industry consortia or even move to DevOps has amplified the opportunity with competitors to develop and share the by making sure the business and the “run” benefits of a needed technology. Companies and “build” houses within IT come together. are entering into multiparty participation Likewise, DevSecOps11 enables tighter integration contracts with fine print for who has decision of yet another function. Funding the pursuit of rights over functionality and design, and under agile opportunities has been both complex and what circumstances ownership of the IP can challenging; it’s now time to bring finance squarely be transferred, among other considerations in the fold of tomorrow’s technology engine. needed for productive collaboration. The why is simple. Funding at the speed of agile • Ecosystem investments with universities. optimizes for the fast flow of safe value. In order Some organizations are working with university to survive and thrive, organizations should adopt innovation hubs to perform research and to new ways of working to sense, explore, invent, keep their fingers on the pulse of technology and innovate. Beyond strategic positioning, it can innovation. Taken a step further, CIOs could drive material impact in the market and ultimately set up a co-creation deal with a university affect the valuation of the organization. On in which the CIO provides funding for average, product companies have valuations that university research to work on a problem are 1x their revenue. For service companies, the set. In return, the CIO and the university average valuation is 2x their revenue. For platform will co-own the resulting IP and can sell it to companies, the average valuation is 8x the revenue other organizations. they generate.12
• Carveout leasebacks. In cases where Transitioning fully to a new funding model won’t an immediate capital infusion is required, happen quickly. For at least the near future, you one option is to identify a set of systems or can run both old and new funding approaches in infrastructure that can be sold to a third party. parallel as you further refine your processes and The third party, in return, leases back the establish governance guardrails. But ultimately, capabilities to the seller under a predetermined the journey can be worth it. The more you embrace set of conditions. In this fashion, CIOs and tech futures, the bigger the impact your efforts CFOs can generate immediate capital funds can have on the way investors, customers, and to spend, while accepting ongoing opex costs your people view your organization and its future for the systems, services, and infrastructure. promise. In some cases, the realized savings can be used to jointly fund new innovation agendas and activities.
48 Finance and the future of IT
LESSONS FROM THE FRONT LINES
Constructing an agile enterprise: Nationwide Building Society takes the long view
ROM ONLINE BANKING to cashless safe and reliable delivery, finance agreed to enable commerce, traditional financial institutions Agile methods and continuous funding in the Fare embracing change to survive—and coming year. Nationwide, the United Kingdom’s 130-year-old building society, is no different. Leaders wanted Eltridge introduced the to deliver more value and services to Nationwide’s 15 million members to excel in an environment “weighted shortest job of digital disruption and increased regulation. In late 2018, the Society hired Patrick Eltridge13 first” (WSJF) prioritization as its COO, aiming to transform the way the method to help the team organization works. prioritize changes ... WSJF Before Eltridge’s arrival, IT and the digital business is not a one-and-done group had launched several Agile initiatives, and Nationwide now looked to create a more cohesive, process—the backlog of enterprise-level approach. Eltridge set out to initiatives is regularly shift the organization’s legacy systems away from waterfall methods, which he views as promoting reviewed and reprioritized. “the illusion that you can fix the time, scope, and cost of work and hold people accountable for During the funding transition, the portfolio immovable milestones.” management office—renamed the Value Realization Office—continued to use waterfall or Agile Eltridge’s charter was to introduce the agile methods, depending on the project type. But when mindset across the enterprise. He approached the office needed to shift investment priorities, finance leaders soon after his arrival, looking Nationwide had not yet defined a way to objectively to partner with them to evolve their traditional evaluate the relative value of inflight changes accounting and investment funding processes to across the entire portfolio. To resolve this, Eltridge better align with IT’s Agile approach. introduced the “weighted shortest job first” (WSJF) prioritization method to help the team prioritize Instead of trying to explain—and win buy-in for— changes based on their projected economic benefit, abstract agile processes, Eltridge engaged finance which is estimated by dividing “cost of delay” by leaders with three commitments: 1) The monthly job size. WSJF is not a one-and-done process—the expenditure rate of IT change would be known and backlog of initiatives is regularly reviewed and not exceeded, 2) change priorities could be revised reprioritized. in less than 30 days with minimal disruption, and 3) there would be no more unplanned software The Value Realization Office led the exercise, write-offs—all music to any CFO’s ears. Convinced inviting product owners, architects, delivery of the benefits and validated by IT’s reputation for leaders, and finance to discuss and vote on
49 Tech Trends 2020
change priorities across the entire portfolio. According to Eltridge, “I’ve seen many The WSJF exercise accomplished the team’s organizations with a bottom-up, grassroots goal of rationalizing budget and investment push toward enterprise agility, but that alone is decisions—and generated an unexpected benefit. seldom sustainable. This sort of change requires “Senior leaders left with a deeper understanding senior leadership understanding, trust, and of the portfolio and interdependencies of the sponsorship to last over the long haul. Leaders work,” Eltridge says. “Prioritization was a happy need to experience this way of working before they byproduct.” can internalize and understand it.” Patience and persistence are required.
Barclays banks on agile
IZE AND HISTORY don’t make an down development and testing. Other business organization safe from rapidly evolving priorities may bubble up depending on competitive Scompetitive pressure, and banking giant pressures, regulatory changes, the emergence of Barclays is adapting by leveraging agile ways of new technologies, evolving operational goals, and working. Nimble fintech startups, business model- other market trends and performance indicators. changing emerging technologies, new consumer data protection regulations, and other industry Outcomes that aren’t driving value for the business challenges led Barclays to launch an enterprisewide are de-emphasized, with funding rerouted to agile adoption initiative in 2015. Since then, more key revenue drivers. Conversely, if a feature is than 800 teams—including the bank’s Trade and increasing revenue, teams could decide to enhance Working Capital (T&WC) business—have adopted it and align more of the capacity-based funding agile principles, values, and practices. to it. Business and technology leaders are equally empowered to prioritize projects. To better support iterative releases, continually changing requirements, cross-functional Finance and technology teams then meet monthly collaboration, and other hallmarks of Agile to review costs and outcomes. Instead of providing software development, Barclays retooled many imprecise long-horizon estimates, the technology planning, budgeting, and finance processes. The team maps investments to key business revenue agile transformation changed the way business, drivers. The move to agile allowed T&WC to finance, and technology functions interact, says increase production delivery frequency twelve-fold, Brijesh Ammanath, global CIO for T&WC.14 from quarterly to weekly, allowing the technology team to demonstrate tangible outcomes even if For example, Ammanath’s technology team was revenue is not immediately projected. challenged to reconcile iterative delivery with its traditional budgeting exercise, typically conducted Barclays’ enterprise operating model—and the 18 months in advance of project delivery. Instead, organization’s mindset—are now fully adapted the team established a rolling wave planning to the agile life cycle. One critical success factor cycle. Technology and business functions meet was intentional communication with business quarterly to discuss and prioritize the product partners—for example, educating the finance team outcome road map and feature deliveries; technical about one project’s cone of uncertainty helped team debt also goes in the queue so that it doesn’t bog members understand why agile was needed and
50 Finance and the future of IT
how the new delivery model worked. Radical cost partners when it comes to prioritizing, delivering, transparency has helped establish trust. Finally, and funding features and products. improving visibility into the delivery process, taking the time to understand business priorities, “Agile has changed everything from the way and consistently meeting delivery commitments we’re structured and how we hire people to the have helped improve cross-functional collaboration tools we use for collaboration,” Ammanath says. and build trust with business stakeholders. As a “It’s a continuous improvement journey, so the result, the T&WC technology team enjoys a high transformation will be ongoing. The whole purpose level of confidence from its business and finance is to be better this week than we were last month.”
Big bang: Rolls-Royce’s bold approach to agile
OR OVER A century, Rolls-Royce has product-oriented delivery model, they focused pioneered some of the world’s most powerful on delivering value more quickly across the Fand efficient engines. From its beginnings company. If the organization tried to build a digital as an internal combustion engine manufacturer, technology foundation using their traditional IT the company has evolved into a leading global operating model, it would be too slow—IT would industrial technology-based innovator of intelligent not be able to keep up with the pace of change in and electrical engines, pioneering cutting-edge the business. technologies to help the planet’s vital power needs. To facilitate continual improvement, Rolls-Royce In the new model, IT and the business work as a is embracing digitalization across the enterprise team to achieve business outcomes. There’s more to create entirely new ways of engineering, energy and empowerment in the organization manufacturing, and serving customers.15 and shared ownership of the corporate strategy. They have also been able to generate more value The transformative journey began in March 2018, and improve efficiencies through simplifying and when leadership restructured the company to drive automating key processes. While there is still work more business value and improve cash flow. Rolls- to be done, the organization has achieved a 40 Royce established several restructuring programs percent reduction in governance forms and a 60 covering areas from culture and organizational percent reduction in management control gates. health advancement to financial improvement and technology transformation.16 Anthony In only eight months, Allcock and the team have Allcock, director of IT business management made significant progress, with the organization and transformation,17 was charged with enabling meeting goals for releasing more value to the the technology transformation by erecting a enterprise through agile processes. And the journey foundation to support agile ways of working across continues: The team has developed a plan for how the enterprise. it can shift to funding agile teams and managing investments in a way that supports Rolls-Royce’s Allcock realized that IT needed to lead the change digital transformation journey and long-term to agile methods. A significant change in the IT ambitions to deliver clean, safe, and competitive operating model became critical to establish a power solutions, while meeting financial goals. foundation for transformation. By using a modern,
51 Tech Trends 2020
MY TAKE
EING AGILE IS about developing a flexible—yet structured—approach to how the entire enterprise works together to create stakeholder value. Instead of completing predefined one-and-done projects, Ban organization builds and delivers products and portfolios of products to meet customer needs. It’s a cycle of continual improvement that supports learning as you go and adjusting direction as issues and opportunities arise.
Delta’s business is built on flight—one of technology’s greatest achievements. We work to provide an exceptional experience for travelers who trust us to comfortably and safely carry them on their journeys around the world. As technology continually evolves and accelerates, we are evolving with it to deliver more value to our stakeholders.
NARAYANAN (KK) To accomplish this, we’re on a journey of our own to become more agile in KRISHNAKUMAR, everything we do. We started in IT, changing our applications and infrastructure VP AND CTO, DELTA AIR LINES to be more aligned with the business to enable new and better customer offerings. We jumped in, learning the mechanics of Agile, training our people, and running sprints and automated builds. Looking back, we were “doing agile,” but we weren’t yet “being agile.” Being agile extends far beyond software development—it creates more flexibility and responsiveness across the enterprise and delivers tangible value as outcome.
So we pivoted. We’re working with the business to shift our focus from projects to portfolios of products. For example, the account management portfolio includes products that enhance customer loyalty, including Delta Sky Club and Medallion status levels. And the catering operations portfolio includes new customer- focused products, such as enabling passengers to preselect their meals.
Our business team members are actively engaged in defining products within the portfolios and setting IT priorities. And in the spirit of being agile, we’ll refine these as we learn. We’re also changing how IT is funded—moving from project-based to product-based funding, with ongoing teams working in sprints to deliver a continuous stream of new and improved product features and value.
I’ve found that as companies shift from a project to a product lens, the agile mindset begins to ripple across the enterprise. At Delta, as IT becomes more agile, the business is changing too, creating new roles for product owners and managers while adapting their ways of working. Sustainable change takes time, and we’re beginning to see a shift to more agile practices across the company.
My advice to other technology executives embarking on this journey is to recognize that building an agile enterprise is more than changing software development processes—being agile requires a cultural shift, beginning at the top. We’ve been on this journey for two years, and we’re seeing results by engaging people at all levels across the organization. Patience is required. The agile journey is one that never ends—there will always be opportunities for improvement ahead.
52 Finance and the future of IT
EXECUTIVE PERSPECTIVES i Finance trate
i Finance trate i Finance trate
STRATEGY FINANCE RISK
As the pressure to do more with Funding IT has often felt like The same pressing need for technology increases, the more art than science, from greater enterprise agility that business and IT can no longer estimating costs and timelines to drives the finance and the future remain separate operating measuring results. And it’s of IT trend also challenges chief entities. By aligning both to becoming more complex— risk officers and other leaders to products or value streams, whether dealing with the impacts reevaluate the way they organizations can develop of adopting enterprise agility or understand and manage risk. greater confidence in their understanding the funding Going forward, risk—like finance technology investments. They investment options from the and other enterprise functions— can create joint outcome road hyperscale cloud providers. For should become enablers of maps and measure key results example, responding to the pace innovation rather than along the way with greater of external disruption requires impediments to it. One approach precision and accuracy. more than just a matter of involves thinking about potential Moreover, as traditional transitioning from an annual to a risks that could arise in a future boundaries separating the rolling funding model. Agile that is largely unknown, rather business from IT disappear, requires changes to internal than basing risk assessments on leaders are making increasingly controls, financing mechanisms, current or past activities. complex technical innovation and to established accounting Consider the kinds of cyber risks decisions. As such, organizations and auditing processes. And that companies currently should work to find the right notably, financial planning and associate with technologies such combination of CFO, CIO, or analysis (FP&A) teams may need as cloud, blockchain, or next- other CXOs to govern decisions. to develop more flexible generation customer experience Even in organizations actively approaches to forecasting profit solutions. They often include exploring new ways to fund and loss for income statements factors like limitations on liability innovation, decision rights are and to calculating operating and identification of third-party likely not on anyone’s agenda at performance. Further, depending risks. While certainly relevant, present. This will change: Left on the magnitude of investments these factors apply to yesterday unaddressed, this issue could made in digital transformation, and today, not tomorrow. easily become an insurmount- CFOs may have to renegotiate Viewing innovation through a able barrier to change. the way they report earnings to backward-facing lens—whether accommodate new FP&A for purposes of funding or approaches and open-ended assessing risk—not only places investments that offer uncertain limitations on innovation’s outcomes. potential but may ultimately undermine competitiveness at a time when speed-to-market is more important than ever.
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ARE YOU READY?
LEARN MORE
How effective is your organization’s drive toward agility? Which parts of the organization have adopted a product-focused 1 REINVENTING TECH operating model? FINANCE
Explore the impact of IT operating model Have you moved to capacity- changes on technology based funding models? With a funding and budgeting. 2 mindset of maximizing enterprise value?
Which flexible approaches for funding innovation are IT and REIMAGINING THE ROLE finance jointly exploring? Which OF TECHNOLOGY creative sources of capital from See how companies are 3 outside your organization are you creating long-term value by taking advantage of to fund key unifying their business and initiatives? technology strategies.
BOTTOM LINE
The work of transitioning to new finance, budgeting, and accounting processes that support agile innovation will not FINANCE 2025 happen overnight. This is a tough nut to crack. But some Read how CFOs are companies are already embracing this trend, shifting from time- preparing the finance based projects to long-lived products and taking a portfolio function—and themselves— for the digital future. view of their innovation investments. In general, these are companies with strong approaches to horizon investments and maturing Agile development capabilities. They are already living with the challenges that are driving this trend and will likely be the first to enjoy the competitive advantages that come when finance funds innovation at the speed of agile.
54 Finance and the future of IT
Authors
JOHN CELI is a principal at Deloitte Consulting LLP with more than 30 years of experience in systems integration and architecture, helping clients realize significant value from large, complex enterprise transformations. Leading the Business Agility practice (Agile & DevOps), he helps clients transform their business and IT organizations to an agile/lean mindset. As a leader in the Life Sciences sector, Celi helps clients achieve results through pragmatic technology implementation, from strategy to deployment.
AJIT KAMBIL is the global research director of Deloitte LLP’s Chief Financial Officer Program. He oversees research in areas such as leadership, capital markets, and risk. Kambil created CFO Insights, a biweekly publication serving more than 38,000 subscribers, and developed Deloitte’s Executive Transition Lab, which helps CXOs make an efficient and effective transition into their new role. He is widely published in leading business and technology journals.
KHALID KARK is a managing director with Deloitte Consulting LLP, leading the development of research and insights for the CIO Program. He has served as a trusted adviser to large, multinational clients and has decades of experience helping technology leaders anticipate and plan for the impacts of new technology. Previously, Kark led the CIO Research practice at Forrester Research. His research has been widely featured in media outlets such as MSNBC, the Boston Globe, and CIO magazine.
JON SMART is a partner with Deloitte MCS Limited in the United Kingdom. With over 25 years of experience, he leads Deloitte UK’s Business Agility practice, helping organizations deliver “Better Value Sooner, Safer, Happier” through the application of agile, lean, and DevOps principles and practices. Smart is the founder of the “Enterprise Agility Leaders Network.”
ZSOLT BEREND is a senior manager in the Business Agility practice within Deloitte MCS Limited. He has 15 years of hands-on experience in applying agile/lean ways of working principles and practices as practitioner, coach, and trainer in a diverse portfolio of industry sectors, predominantly health care, telecom, and financial services. Berend helps clients to enable “Better Value Sooner, Safer, Happier.”
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SENIOR CONTRIBUTORS
Tony Caink Stephan Kahl Director Senior manager Deloitte MCS Limited Deloitte Consulting GmbH
Jacques de Villiers Kelly Gaertner Managing director Manager Deloitte Consulting LLP Deloitte Consulting LLP
Richard Walker Principal Deloitte Consulting LLP
56 Finance and the future of IT
Endnotes
1. Bill Briggs et al., Manifesting legacy: Looking beyond the digital era, Deloitte Insights, August 8, 2019.
2. Khalid Kark et al., The future of work in technology, Deloitte Insights, June 10, 2019.
3. Atlassian, “Agile practice: The competitive advantage for a digital age,” Harvard Business Review Analytics Group, April 24, 2016.
4. Open Group, Building return on investments from cloud computing.
5. Briggs et al., Manifesting legacy.
6. Ajit Kambil Online, “Real options,” 2014
7. Khalid Kark, Reinventing tech finance: The evolution from IT budgets to technology investments, Deloitte Insights, January 7, 2020.
8. John R. Tweardy et al., Keeping your head in the cloud: The vital role of CFOs in strategic cloud computing decisions, Deloitte Development LLC, 2018.
9. Carsten Brockmann et al., Stepping stones to an agile enterprise, Deloitte Insights, July 29, 2019.
10. Andrew Horne, “CIOs should make 5 changes to IT funding in an age of digitization,” InformationWeek, March 17, 2017.
11. Vikram Kunchala et al., DevSecOps and the cyber imperative, Deloitte Insights, January 16, 2019.
12. William Ribaudo, “Global report on technology and the economy,” Strategic News Service, vol. 21, issue 16, May 2, 2016.
13. Patrick Eltridge, chief operating officer, Nationwide Building Society, interviewed October 1, 2019.
14. Brijesh Ammanath, global CIO for Trade and Working Capital, Barclays, interviewed by phone October 3, 2019.
15. Rolls-Royce, “Our vision and strategy,” accessed November 15, 2019.
16. Asavin Wattanajantra, “3 lessons for CFOs from Rolls-Royce’s digital transformation,” Sage, January 2, 2019.
17. Anthony Allcock, director of IT business management and transformation, Rolls-Royce, interviewed by phone October 15, 2019.
57 TREND SUMMAR Y D E F INIT I O N
Leveraging next-generation digital twin capabilities ә tә t di ita i u ation of h ica to design, optimize, and transform the enterprise. te a et or roce e ften aired ith IoT techno o to in tru ent i u ated te T in are u orted data cience and achine earnin and u o ti i ation and in i ht for PHYSICAL DIGITAL h ica or d action TWIN TWIN
IN T A G G R E G E S SS CE EG R A T R O I P O N A T
I B Y THE N UMBERS O N
S D A T SOR A EN S i u ation i ua i ation 3 A
S ata ource N N A L O I WHA T ’S NEW YS I T C S A In tru entation ro ected co ound annua Intero era i it ro th rate of the di ita t in ar et fro i ion in A C atfor T U A I to i ion T O R A S
IN T TREND B R E A K DOW N EGR A
D E C I T T S I
S O I O S IGH N N S IN o t ve
ou ore
H UMAN S t re ty i u ated outco e tren then deci ion a in
i ita t in ar et orth i ion re re ea e ar et and ar et u Digital twins: Bridging the physical and digital
TREND SUMMAR Y D E F INIT I O N
Leveraging next-generation digital twin capabilities di-jә-tәl / twin Digital twins A digital simulation of physical to design, optimize, and transform the enterprise. systems, assets, or processes. Bridging the physical and digital Often paired with IoT technology to instrument simulated systems. Twins are supported by data science and machine learning, and supply optimizations and insights for PHYSICAL DIGITAL physical world action. TWIN TWIN
IN T A G G R E G E S SS CE EG R A T R O I P O N A T
I B Y THE N UMBERS O N
MAGINE THAT YOU had a perfect digital copy of the physical world: a digital twin. This twin would enable you to collaborate S virtually, intake sensor data and simulate conditions D A T I SOR A EN quickly, understand what-if scenarios clearly, predict results S Simulation more accurately, and output instructions to manipulate the Visualization 38% physical world. A
S Data sources N N A L O I WHA T ’S NEW YS I Today, companies are using digital twin capabilities in a variety of T
C ways. In the automotive1 and aircraft2 sectors, they are becoming S A Instrumentation Projected compound annual essential tools for optimizing entire manufacturing value chains Interoperability growth rate of the digital twins market, from US$3.8 billion in and innovating new products. In the energy sector, oil field service A C Platform T U † A I 2019 to US$35.8 billion by 2025. operators are capturing and analyzing massive amounts of in-hole T O R A S data that they use to build digital models that guide drilling efforts in real time.3 In health care, cardiovascular researchers are creating highly accurate digital twins of the human heart for clinical diagnoses, education, and training.4 And in a remarkable IN T TREND B R E A K DOW N feat of smart-city management, Singapore uses a detailed virtual EGR A model of itself in urban planning, maintenance, and disaster 5 D readiness projects. E C I T T S I
S O I O S IGH N N S IN Cognitive Digital twins can simulate any aspect of a physical object or process. They can represent a new product’s engineering drawings and dimensions, or represent all the subcomponents and corresponding lineage in the broader supply chain from the design Cloud Core table all the way to the consumer—the “as built” digital twin. They may also take an “as maintained” form—a physical representation H UMAN S Digital reality of equipment on the production floor. The simulation captures how Simulated outcomes the equipment operates, how engineers maintain it, or even how strengthen decision-making the goods this equipment manufactures relates to customers.
†MarketsandMarkets, “Digital twin market worth $35.8 billion by 2025.” 59 Tech Trends 2020
Digital twins may take many forms, but they all more detailed and dynamic than ever.10 For capture and utilize data that represents the physical longtime digital twins users, it is like moving from world. fuzzy, black-and-white snapshots to colorful, high-definition digital pictures. The more Recent MarketsandMarkets research suggests that information they add from digital sources, the more such efforts are already underway: The digital twins vivid—and revealing—the pictures become. market—worth US$3.8 billion in 2019—is projected to reach US$35.8 billion in value by 2025.6 Models + data = insights What accounts for this kind of growth? And why and real value now? After all, digital twin capabilities are not new. Since the early 2000s, pioneering companies have Digital twin capabilities began as a tool of choice in explored ways to use digital models to improve the engineer’s toolbox because they can streamline their products and processes.7 While digital twins’ the design process and eliminate many aspects of potential was clear even then, many other prototype testing. Using 3D simulations and companies found that the connectivity, computing, human-computer interfaces such as augmented data storage, and bandwidth required to process reality and virtual reality,11 engineers can determine massive volumes of data involved in creating digital a product’s specifications, how it will be built twins were cost-prohibitive.8 and with what materials, and how the design measures against relevant policies, standards, and Digital twins are poised regulations. It helps engineers identify potential manufacturability, quality, and durability issues— to transform the way all before the designs are finalized. Thus, traditional companies perform prototyping accelerates, with products moving into production more efficiently and at a lower cost. predictive maintenance of products and Beyond design, digital twins are poised to transform the way companies perform predictive machinery in the field. maintenance of products and machinery in the field. Sensors embedded in the machines feed The digital twins trend is gaining momentum performance data into a digital twin in real time, thanks to rapidly evolving simulation and modeling making it possible not only to identify and address capabilities, better interoperability and IoT sensors, malfunctions before they happen but to tailor and more availability of tools and computing service and maintenance plans to better meet infrastructure. As a result, digital twins’ capabilities unique customer needs. Recently, Royal Dutch are more accessible to organizations large and Shell launched a two-year digital twin initiative to small, across industries. IDC projects that by 2022, help oil and gas operators manage offshore assets 40 percent of IoT platform vendors will integrate more effectively, increase worker safety, and simulation platforms, systems, and capabilities to explore predictive maintenance opportunities.12 create digital twins, with 70 percent of manufacturers using the technology to conduct Digital twins can help optimize supply chains, process simulations and scenario evaluations.9 distribution and fulfillment operations, and even the individual performance of the workers involved At the same time, access to larger volumes of data is in each. As an example of this in action, global making it possible to create simulations that are consumer products manufacturer Unilever has
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launched a digital twin project that aims to create incorporated into digital twin simulations. virtual models of dozens of its factories. At each Likewise, IoT sensors embedded in machinery location, IoT sensors embedded in factory or throughout supply chains can feed machines feed performance data into AI and operational data directly into simulations, machine learning applications for analysis. The enabling continuous real-time monitoring. analyzed operational information is to be fed into the digital twin simulations, which can identify • Interoperability. Over the past decade, the opportunities for workers to perform predictive ability to integrate digital technology with maintenance, optimize output, and limit waste the real world has improved dramatically. from substandard products.13 Much of this improvement can be attributed to enhanced industry standards Smart city initiatives are also using digital twins for for communications between IoT sensors, applications addressing traffic congestion operational technology hardware, and vendor remediation, urban planning, and much more. efforts to integrate with diverse platforms. Singapore’s ambitious Virtual Singapore initiative enables everything from planning for cell towers • Visualization. The sheer volume of data and solar cells to simulating traffic patterns and required to create digital twin simulations can foot traffic. One potential use may be to enable complicate analysis and make efforts to gain emergency evacuation planning and routing during meaningful insights challenging. Advanced data the city’s annual street closures for Formula 1 visualization can help meet this challenge by racing.14 filtering and distilling information in real time. The latest data visualization tools go far beyond basic dashboards and standard visualization What’s new? capabilities to include interactive 3D, VR and AR-based visualizations, AI-enabled Over the course of the last decade, deployment of visualizations, and real-time streaming. digital twin capabilities has accelerated due to a number of factors: • Instrumentation. IoT sensors, both embedded and external, are becoming smaller, • Simulation. The tools for building digital more accurate, cheaper, and more powerful. twins are growing in power and sophistication. With improvements in networking technology It is now possible to design complex what-if and security, traditional control systems can be simulations, backtrack from detected real- leveraged to have more granular, timely, and world conditions, and perform millions of accurate information on real-world conditions simulation processes without overwhelming to integrate with the virtual models. systems. Further, with the number of vendors increasing, the range of options continues to • Platform. Increased availability of and grow and expand. Finally, machine learning access to powerful and inexpensive computing functionality is enhancing the depth and power, network, and storage are key enablers usefulness of insights. of digital twins. Some software companies are making significant investments in cloud-based • New sources of data. Data from real- platforms, IoT, and analytics capabilities that time asset monitoring technologies such as will enable them to capitalize on the digital LIDAR (light detection and ranging) and twins trend. Some of these investments are FLIR (forward-looking infrared) can now be part of an ongoing effort to streamline the
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development of industry-specific digital twin And with the cost of sensors dropping, how many use cases. sensors is enough? Balancing the cost/benefit analysis is critical. Modern aircraft engines can have thousands or tens of thousands of sensors, Costs versus benefits generating terabytes of data every second. Combined with digital twins, machine learning, The AI and machine learning algorithms that and predictive models, manufacturers are power digital twins require large volumes of data, providing recommendations to help pilots optimize and in many cases, data from the sensors on the fuel consumption, help maintenance be proactive, production floor may have been corrupted, lost, or and help fleets manage costs.15 Most use cases, simply not collected consistently in the first place. however, require only a modest number of So teams should begin collecting data now, strategically placed sensors to detect key inputs, particularly in areas with the largest number of outputs, and stages within the process. issues and the highest outage costs. Taking steps to develop the necessary infrastructure and data management approach now can help shorten your Models beyond time to benefit. In the coming years, we expect to see digital twins deployed broadly across industries for multiple use Balancing the cost/benefit cases. For logistics, manufacturing, and supply analysis is critical. Modern chains, digital twins combined with machine learning and advanced network connectivity such aircraft engines can have as 5G will increasingly track, monitor, route, and optimize the flow of goods throughout factories thousands or tens of and around the world. Real-time visibility into thousands of sensors, locations and conditions (temperature, humidity, etc.) will be taken for granted. And without human generating terabytes of intervention, the “control towers” will be able to data every second. take corrective actions by directing inventory transfers, adjusting process steps on an assembly line, or rerouting containers. Even in cases where digital twin simulations are being created for new processes, systems, and Organizations making the transition from selling devices, it’s not always possible to perfectly products to selling bundled products and services, instrument the process. For chemical and or selling as-a-service, are pioneering new digital biological reactions or extreme conditions, it may twin use cases. Connecting a digital twin to not be possible to directly measure the process embedded sensors and using it for financial itself; in some cases, it may not be cost-effective or analysis and projections enables better refinement practical to instrument the physical objects. As a and optimization of projections, pricing, and upsell result, organizations need to look to proxies (for opportunities. example, relying on the instrumentation and sensors in a vehicle rather than putting sensors For example, companies could monitor for higher into tires) or things that are possible to detect (for wear-and-tear usage and offer additional warranty example, heat or light coming from chemical or or maintenance options. Or organizations could biological reactions). sell output or throughput as-a-service in industries
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as varied as farming, transportation, and smart entire ecosystems. Creating a digital simulation of buildings. As capabilities and sophistication grow, the complete customer life cycle or of a supply expect to see more companies seeking new chain that includes not only first-tier suppliers but monetization strategies for products and services, their suppliers, may provide an insight-rich macro modeled on digital twins. view of operations, but it would also require incorporating external entities into internal digital ecosystems. Today, few organizations seem Modeling the digital future comfortable with external integration beyond point-to-point connections. Overcoming this As the digital twins trend accelerates in the coming hesitation could be an ongoing challenge but, years, more organizations may explore ultimately, one that is worth the effort. In the opportunities to use digital twins to optimize future, expect to see companies use blockchain to processes, make data-driven decision in real time, break down information silos, and then validate and design new products, services, and business and feed that information into digital twin models. Sectors that have capital-intensive assets simulations. This could free up previously and processes like manufacturing, utilities, and inaccessible data in volumes sufficient to make energy are pioneering digital twin use cases already. simulations more detailed, dynamic, and Others will follow as early adopters demonstrate potentially valuable than ever. first-mover advantage in their respective sectors. It’s time to transition your digital organization Longer term, realizing digital twins’ full promise from black-and-white to color. Are you ready? may require integrating systems and data across
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LESSONS FROM THE FRONT LINES Prepare for takeoff: Airservices Australia enters the future of aviation
IRSERVICES AUSTRALIA IS preparing for While still in development, the digital twin project the aviation industry’s next evolution. As is also serving as a proving ground for enhancing Athe continent’s provider of air navigation Airservices’ traditional ways of working. The services, it expects the volume of conventional company’s heritage is built on safely delivering flights in its airspace to double over the next two navigation services 24 hours a day, 365 days a year. decades. Meanwhile, the emergence of unmanned With an unwavering focus on safe, efficient, and aerial vehicles in low altitude airspace—from reliable service delivery, the increasing airspace aerial taxis to delivery drones—is accelerating the complexity is driving Airservices to explore new need for new intelligent systems, compounding an solutions. already difficult job. The digital twin project is helping change Airservices is addressing these challenges by Airservices’ view of what’s possible. The team launching initiatives that will enable it to shift to piloted an Agile development approach to improve leveraging the value of data and providing the time to market while preserving the focus on safety. information management services of the future. The teams are delivering working software at a One of these initiatives is to explore how a digital faster pace—iterating, testing, and learning in short twin, combined with IoT and machine learning sprints—and continuing to provide safe, accurate capabilities, could enhance Airservices’ ability to predictions. And while Airservices people have manage air traffic today and in the years to come. deep aeronautical expertise, the company also needed specialized technical knowledge to build The Service Strategy team, led by Mick Snell,16 and implement advanced analytic capabilities. The kicked off its digital twin development project in team filled that gap with vendors and advisers who early 2019 with a practical objective: determine offer highly relevant experience and off-the-shelf whether a digital twin can enhance Airservices’ technology. ability to manage its current air traffic network. For example, could it be used to enhance flight routes, Meanwhile, the team continues to uncover relevant optimize takeoff times, and reduce delays? use cases for the digital twin. For example, air traffic controllers currently work in an assigned The team began by developing a digital twin of airspace regardless of traffic volume. To optimize Airservices’ air traffic network using historic air the controllers’ workload, the team plans to use the traffic data. The team has completed four proofs digital twin to assign airspace to controllers based of concept proving out the original objective and on predicted customer demand rather than fixed is looking forward to piloting them in parallel with geographic locations. existing air traffic control systems. The proofs of concept were able to optimize flight routes based Optimization is an extraordinarily complex issue on real-time conditions to provide better traffic that requires volumes of real-time data to support flow management. what-if scenarios on the fly to help air traffic controllers to make faster, smarter decisions. The digital twin can also enable Airservices customers
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(pilots) to optimize flights based on what’s most of scenarios for managing the multidimensional important in the moment. For example, optimizing airspace of the future. airspace and routing helps increase on-time arrivals and saves fuel, but a pilot may decide to With the proof-of-concept phase complete, the trade fuel for additional speed to avoid passengers team is moving into preproduction. Members will missing their connections. be running trials with current data for several more months and then move into full-scale production, Eventually, Airservices plans to use digital twins planned for 2020. Snell reports, “We’ve been able to develop and test strategies for dealing with to accelerate to an outcome far faster—we’ve come disruptive innovations likely to affect its airspace. further in the last eight months than in the last Strategists will be able to quickly test a wide range eight years.”
Gaining traction: Bridgestone’s digital twin drives an innovative business model
RIDGESTONE, THE WORLD’S largest tire chain, with the goal of enhancing profitability, and rubber manufacturer, is transforming sustaining competitive advantage, reducing Bto become a leader in mobility solutions. time-to-market, and delivering leading-edge tire- The company is reimagining its core business as-a-service offerings. by developing digital capabilities that will enable it to revolutionize tire management European fleets are gradually shifting to a price- services to its portfolio of offerings addressing per-kilometer (PPK) subscription model, a way for vehicle manufacturers, fleet operators, and fleet operators to optimize cash flow and reduce individual drivers. total cost of ownership. But while the business model is simple, setting the appropriate price While the business model per kilometer is anything but. A tire’s lifespan is heavily influenced by a myriad of factors, including is simple, setting the load, speed, road conditions, and driving behavior. appropriate price per A digital twin can provide insight into how these interrelated conditions affect tire performance by kilometer is anything but. simulating various driving conditions. But without real-world data inputs for the digital twin, setting Digital twin technology is at the heart of a price that hits the sweet spot at which the PPK is Bridgestone’s transformational journey. The competitive—and sustainably profitable—is difficult company has used digital twin simulations if not impossible. augmented by sensor data as an R&D tool for several years to improve tire life and performance, Bridgestone took a strategic leap by entering the but that’s just the beginning. Jerome Boulet, digital PPK market with a product priced to win business strategy director, and Hans Dorfi, director of from large fleets. The company used this initial digital engineering,17 together with their teams, are install base to collect performance data that was developing sophisticated digital twins to eventually then fed into advanced analytics algorithms. deliver insights across Bridgestone’s entire value
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According to Dorfi, “Some people ask, ‘Why do tires are being used in real time, enabling the you need a digital twin if you have big data—why company to help fleets select the appropriate tires not just run analytics?’ I explain that while for their specific driving conditions and provide analytics plays a major role, it only augments the customized insights into how they can reduce tire digital twin. The digital twin is able to capture the wear or avoid breakdowns. As the digital model multidimensional performance envelope of tires becomes more and more accurate, Bridgestone will and can also be applied to product in development, address increasingly advanced use cases for its PPK where no data is yet available.” He sees the digital business model. twin as a key component of Bridgestone’s digital infrastructure. Incoming sensor data is augmented, Today, Bridgestone is using digital technologies cleaned, and processed; then digital simulations to add more value for its fleet customers. Over and analytics are applied to derive insights that time, the company intends to expand its use of inform decisions around maintenance, rotations, digital twin technology to connect its entire value and other factors that can deliver more value for chain, from drivers and fleet managers to retailers, Bridgestone and its customers. distributors, and manufacturers. Looking ahead, leaders see opportunities to inform safety protocols Bridgestone continues to enhance the digital twins. in a world that includes self-driving vehicles. The 2019 acquisition of WebFleet Solutions18 and “We’re making sure we have the enablers in place the development of next-generation sensors will that will take us into the future,” Dorfi says. “And enable Bridgestone to learn how vehicles and that’s where digital twin technology comes in.”
Takeda pursues end-to-end manufacturing automation with digital twins
AKEDA PHARMACEUTICALS IS constantly Pistek is always looking for ways to accelerate seeking scientific breakthroughs to deliver experimentation and business processes. transformative therapies to patients T 19 worldwide. Christoph Pistek leads innovation Even in the digital age, pharmaceutical during the company’s development life cycle, manufacturing processes may contain manual translating promising research ideas into tangible steps. For example, making biologics, vaccines, medical products. His team also develops processes and other pharma products derived from living for how commercial manufacturing partners will organisms involve biochemical reactions, which actually make the products. can be variable and difficult to measure, making automation challenging. And no one has yet Because the industry is tightly regulated with strict perfected a method for automatically progressing quality control mandates, any process innovation from one manufacturing step to the next. True must be thoroughly tested in the development end-to-end manufacturing automation has become lab for compliance before being introduced to the industry’s “holy grail,” Pistek says. the manufacturing floor. It can take up to 15 years to bring a new medicine to patients, so This is where digital twins come in. They help his team accelerate experimentation, develop new
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manufacturing approaches, and generate data to over time while still in development.” The end enable more informed decisions and predictions goal is a digital twin that can control and steer the that could help automate complex chemical and automation process without human intervention. biochemical processes. In Takeda’s development labs, the ecosystem for To that end, Pistek and his development team this integrated approach is up and running for build sophisticated virtual representations of the one modality: biologics, which is the company’s manufacturing processes in their development fastest-growing category and involves one of labs. The team builds a digital twin for each process pharma’s most complex manufacturing processes. step and then links all parts via an overall digital The foundational work is complete—the twins twin that controls and automates the flow from one are operational, the architecture is built, and the step to another, forming an end-to-end simulation method is in place. of the manufacturing process.
While modeling chemical processes is complicated, While modeling chemical modeling biochemical reactions can be far more processes is complicated, complex and irregular. In many cases, real-time sensors cannot monitor the desired outputs, and modeling biochemical the output quality remains unknown for hours reactions can be far more or days. Instead, the development team uses “soft sensors” or proxy measurements to attempt complex and irregular. to predict the time required to complete the biochemical reaction, which is fed into a digital Now the team is refining the process to make twin that incorporates AI and machine learning. it more robust. Pistek expects to expand this “The important aspect is that the architecture of automation approach within the development digital twins allows the system to evolve on its lab across all modalities in the next year. And in own,” Pistek says. “Every time we do an additional two to three years, he expects to see sophisticated run and compare the soft sensor results against examples of this automation approach in use on a true measurement that comes back from the commercial manufacturing floor. the quality control lab, we’re able to make the predictions more accurate.” Modeling biology and chemical reactions in a digital twin is not straightforward and is difficult Some pharma companies think the key to to recreate. Pistek’s advice to others considering automation is a matter of better equipment, building digital twins: “Don’t wait, don’t be sensors, or technology. But Pistek has a intimidated, just do it. It’s a learning process that different opinion: “The true enabler for pharma takes time. At Takeda, it’s a critical capability for is the control architecture across and around the job we have to do—find cures for diseases and the process—and the foundation of that is a provide aid to those who suffer.” sophisticated digital twin that can mature itself
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MY TAKE
EOPLE RELATE TO the frustration that traffic congestion creates—and are dissatisfied that it often takes decades to build infrastructure improvements. Our mission is to plan and develop transportation Psystems that accommodate San Diego’s growing population and healthy economy, while meeting government requirements for improving traffic flow, air quality, and greenhouse gas emissions. And of course, we are working with our various communities to build public support for our anticipated recommendations. Anything we can do to get projects underway quickly can shave months or even years off the timeline.
These are the reasons SANDAG planners and data modelers are developing a nimble digital twin—or “sketch planning” tool—based on FutureScape™, a modeling and simulation platform that creates digital replicas of large systems, RAY TRAYNOR like those in a city or an entire region. We’re using FutureScape to complement CHIEF PLANNING AND our government-mandated travel demand model, a macro simulation tool we INNOVATION OFFICER, refer to as an Activity-Based Model. SAN DIEGO ASSOCIATION OF GOVERNMENTS (SANDAG) Regulators require that we run our proposals through the model to certify that the proposals meet federal and state government criteria. It’s a deliberate, arduous process that requires months of calibration and testing and processing times that can take weeks to complete. The new sketch tool will enable us to quickly evaluate a wider range of traditional and innovative transportation options. The Activity-Based Model will process the most promising solutions to certify that the proposed transportation solutions meet regulatory requirements.
For example, one of our goals is to relieve rush-hour congestion between San Diego’s most populated residential areas and the region’s largest employment center. Widening roads is the traditional go-to solution in our car-oriented region, but we believe the sketch tool will enable us to compare road-widening with other options. These options include fast rail lines or light rail systems. Results from the tool should arrive within hours or days, not weeks.
Clearing the regulatory bar is only one factor, of course. Transportation planners must also wonder, “If we build it, will they come?” Evaluating different scenarios is key to answering that question. Using the Activity- Based Model’s historical data, which is largely based on dated commuter surveys and travel diaries, limits our ability to be dynamic and current in how we measure future utilization and demand. We are working to incorporate near-time digital data and, eventually, artificial intelligence into the sketch tool to help us better reflect behavior in response to new transportation options. We also want to consider proposals that include on-demand transportation options and new trends in mobility, such as ridesharing, electric scooters, and bikes, with an eye to incorporating driverless vehicles when they become a viable option.
We also use a digital twin to support real-time traffic management. Here, I envision that adding AI enhancements to the tool will enable proactive decision-making for reducing day-to-day traffic congestion. The current system works well for reacting to traffic backups, using a microsimulation tool that evaluates current traffic flows every three minutes. When an incident disrupts normal traffic patterns, the tool can generate a set of solutions, such as temporarily diverting traffic to another road, which is deployed through
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changeable highway messages. We’re developing an AI-based strategy aimed to sense potential traffic disruptors in real time. When you’re directing tens of thousands of rush-hour commuters, minutes matter.
By enabling fast, interactive feedback, our sketch planning digital twin will help us quickly develop innovative solutions to complex transportation problems. At SANDAG, we see data-based tools such as FutureScape playing key roles in helping us offer appealing—and environmentally beneficial—mass-transit options to many of our residents accustomed to our car-oriented culture.
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OUR TAKE
HILE A COMPLETE digital twin of the human body is years or even decades away, researchers are chipping away at understanding the biological processes that transform us from DNA into human Wbeings. Today’s research is enabled by advances in genetic sequencing and functional genomics, growing volumes of long-term health data of populations, and increasing capabilities in advanced analytics. This growing knowledge base will inform digital simulations that could eventually help medical professionals control or prevent genetic diseases and disorders.
The project is daunting. Within the human body, DNA provides the instructions for cell growth, which are “expressed” within individual cells to create hundreds of different cell types, including blood cells, nerve cells, muscle cells, and immune cells. Different types of cells combine to produce tissues, which are combined to form organs; for example, there may be more than 10 different types of cells in the tissues that comprise the liver.
WING WONG As a first step toward creating better virtual models of biological systems, we PROFESSOR OF STATISTICS AND OF HEALTH RESEARCH AND are working to understand the “instructions” that influence a cell’s development POLICY, STANFORD UNIVERSITY into tissues and organs and, eventually, entire systems, such as the circulatory system. Our research builds on the development of single-cell genomics. Until recently, scientists were able to study only groups of cells, because they lacked the technical capability to extract enough DNA and RNA from a single cell to support genomic analyses. We’re taking single-cell genomics findings to the next level, to understand how single cells construct the gene regulatory systems that underlie the different cell types in tissues and organs.
XUEGONG ZHANG In Professor Wong’s lab in California, we’re studying the regulation of gene PROFESSOR OF expression in cells, trying to understand how different genes are expressed BIOINFORMATICS AND and how those genes affect the cells they eventually create. Using advanced MACHINE LEARNING, mathematical models, we are studying huge volumes of data to try to better TSINGHUA UNIVERSITY understand how cells develop into tissues.
After cells and tissues, the next level is organs. In Professor Zhang’s lab in Beijing, we are studying the heart to understand what types and subtypes of cells make up different parts of that organ. With a deeper knowledge of how the heart is constructed, we anticipate having a better understanding of how heart problems arise. By comparing what we’re seeing in the lab with the heart conditions we see in the broad population, we expect to be able to better predict what conditions lead to which health outcomes—positive or negative.
We intend to expand beyond studying specific tissues and organs to construct a digital simulation of the human circulatory system. We’re developing a framework to take in massive amounts of data generated by electronic health records and large-scale research mapping efforts, such as the Human Cell Atlas project.20 But data sets alone are not very useful, so we’re building a type of digital twin: a multilevel causal network,
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a complex mathematical model to represent the functioning system and the underlying linkages between the different layers. One day, we hope to be able to connect all the data from the DNA in the genome to health outcomes in the general population to better understand how cell instructions, cell types, tissues, organs, and health outcomes are all interconnected.
Within the next three years, our goal is to build out a set of quantitative, layer-by-layer models to help interpret the genomic system. We expect the day will come when physicians will examine a newborn’s genome sequence and understand the impact of its variants (that is, its differences from the reference genome) along with other factors, leading to insights for resolving or preventing disease or disorders. Over time, researchers may use these findings to create a digital twin of the entire human body to help us better understand and simulate how disease and other changes may manifest in the body. Meanwhile, we, along with researchers around the world, have a lot of work ahead.
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EXECUTIVE PERSPECTIVES i Finance trate
i Finance trate i Finance trate
STRATEGY FINANCE RISK
While digital twin technologies Digital twins offer increasing As digital twin technology that simulate the physical world potential to affect the bottom integrates with IoT and AI, its have been around for years, new line of organizations but aren’t disruptive power grows. In the advances warrant taking a consistently well understood by current business climate, any second look at current CFOs and their teams. To many potential technology-driven capabilities. The combination of in the finance function, disruption has material risk cheap sensors and IoT, machine traditional digital twin implications for the entire learning, and the fast, frictionless simulations of manufacturing organization. Digital twin–driven nature of cloud enable more processes and warehouse process efficiencies might not sophisticated analyses and real- logistics are black boxes owned increase risk significantly, at least time simulations. While by manufacturing or engineering. initially. But as reliance on digital manufacturing scenarios have However, the growing availability twin technology grows, used these capabilities for years, of high-quality simulations, companies will be aggregating organizations are increasingly machine learning, and massive stores of data from exploring ways to deploy digital embedded sensors is changing sensor networks and other twins for operations, city the art of the possible. Some sources, which may, in turn, planning, smart infrastructure, organizations that are shifting increase privacy or cyber risk. and more. Moreover, as from selling products to Likewise, if digital twin systems companies look to migrate to products-plus-services or as-a- enable a new business model selling as-a-service business service models are using robust featuring several as-a-service models, digital twins’ increasingly digital twins. They are tracking offerings, organizations should sophisticated capabilities are usage with embedded sensors, understand what material impact worth a closer look. The creating new offerings for usage these new revenue streams may challenging decisions will then be recommendations, proactive have on finance, technology, and whether to make small maintenance, or profitability existing business models. If the investments to create tests and optimization. Working with the IT potential risks are significant, experiments or larger function to understand digital companies will likely need to investments to support twins’ uses today and potential develop strategies for measuring innovation more broadly. uses of tomorrow is becoming and managing them before IT increasingly important, and the business proceed any particularly to support new further with the digital twin product and service design project. and delivery.
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ARE YOU READY?
LEARN MORE
Which of your systems, processes, products, or outputs would be strong candidates for inclusion in 1 a digital twin pilot? EXPECTING DIGITAL TWINS
Learn how leading companies are using digital twins to increase If you are moving to as-a-service efficiency, reduce costs, models or bundling services with and build better products. products, how can a digital twin 2 reduce your time to market and reduce overall costs?
What infrastructure and technical INDUSTRY 4.0 AND platforms do you have in place THE DIGITAL TWIN today to support digital twin 3 Read on! With a digital capabilities? simulation of a manufacturing process, you can solve problems more quickly and build better products.
BOTTOM LINE
In the future, everyone and everything—people, services, INDUSTRY 4.0 global enterprises, and even cities—could have a digital twin. COLLECTIONS PAGE That scale may not happen in the next 18 to 24 months, but the digital twins trend will evolve and grow for years to come. Check out this intriguing Pilots and prototypes can help identify potential areas where collection of articles that companies can benefit from digital twin capabilities, but the time explores today’s digital to embrace this next disruptive transformation phase is now. industrial revolution.
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Authors
ADAM MUSSOMELI is a principal at Deloitte Consulting LLP with more than 25 years of experience delivering global, highly complex supply chain transformations. He is the Supply Chain & Network Operations National Offering leader, delivering substantial income statement and balance sheet benefits to his clients. Mussomeli cofounded Deloitte’s Digital Supply Networks practice, which is redefining the supply chain for the digital age.
AARON PARROTT is a managing director with Deloitte Consulting LLP. With more than 20 years of experience in supply chain and network operations, he focuses on helping clients complete large-scale transformation in the supply network, developing analytic solutions to address difficult business issues, and implementing digital solutions to manage complex supply networks. Parrott’s areas of expertise include specializing in digital supply networks, IoT solutions, enterprise lean transformation, and supply network advanced analytics.
BRIAN UMBENHAUER is a principal with Deloitte Consulting LLP. He is a leader in the Industrial Products & Construction sector, as well as the Global Sourcing and Procurement practice. In his two decades of experience, Umbenhauer takes a personalized approach to building consulting practices, collaborating with clients, driving engagements and, above all, measuring value. He has a proven track record in global business development, operations/business strategy advisory, and nontraditional approaches to creating client value.
LANE WARSHAW is a managing director with Deloitte Consulting LLP in the Strategy & Analytics, Analytics & Cognitive (A&C) market, focusing on enabling better use of data in the Industrial Products and Construction (IP&C) industry using next- generation technologies. As the IP&C lead for A&C, he focuses on delivering tangible value through supply chain and customer analytics programs enabled by data management, data warehouse, big data, data science, visualization, and cognitive technologies.
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SENIOR CONTRIBUTORS
Saul Caganoff Markus Stulle Principal Senior manager Deloitte Services Pty Ltd Deloitte
Chandra Kiran Reddy Narra Oleg Tyschenko Managing director Senior manager Deloitte Consulting LLP Deloitte MCS Limited
Tim Paridaens Anand Ananthapadmanabhan Director Manager Deloitte Belgium CVBA Deloitte & Touche LLP
Sandeep Sharma Piotr Kurek Managing director Manager 3 Deloitte Consulting LLP Deloitte Advisory sp. z o.o. sp. k
Andreas Staffen Paulo Mauricio Director Manager Deloitte Deloitte & Associados, SROC S.A.
Jimmy Asher Vikram Tuli Senior manager Senior consultant Deloitte Consulting LLP Deloitte MCS Limited
Rick Burke Dan Lu Specialist leader Consultant Deloitte Consulting LLP Deloitte MCS Limited
Yang Chu Hermann Tsang Senior manager Consultant Deloitte & Touche LLP Deloitte MCS Limited
Eduardo Pereira Master lead specialist Deloitte & Associados, SROC S.A.
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Endnotes
1. Arjen Bongard and Daniela Hoffmann, “Digital twins play a role in all digitalization projects but data consolidation slows down implementation,” Automotive IT, January 4, 2019.
2. Woodrow Bellamy III, “Boeing CEO talks ‘digital twin’ era of innovation,” Avionics International, September 14, 2018.
3. Greg Powers, “At Halliburton, real-time data delivers,” Deloitte CIO Journal on the Wall Street Journal, September 25, 2017.
4. Dassault Systèmes, “The Living Heart Project,” accessed January 7, 2020.
5. Felix Todd, “Digital twin examples: Simulating Formula 1, Singapore and wind farms to improve results,” NS Business, January 22, 2019.
6. MarketsandMarkets, “Digital twin market worth $35.8 billion by 2025.”
7. Carlos Miskinis, “The history and creation of the digital twin concept,” Challenge Advisory, March 2019.
8. Aaron Parrott and Lane Warshaw, Industry 4.0 and the digital twin: Manufacturing meets its match, Deloitte Insights, May 12, 2017.
9. Carrie MacGillivray et al., “IDC FutureScape: Worldwide IoT 2019 predictions,” IDC, October 2018.
10. Parrott and Warshaw, Industry 4.0 and the digital twin.
11. Jonathan Lang, “AR and digital twin technologies are a powerful combination,” PTC, July 8, 2019.
12. Elaine Alhadeff, “Serious games using digital twins of offshore oil and gas environments,”Serious Game Market, November 26, 2018.
13. Jennifer Smith, “Unilever uses virtual factories to tune up its supply chain,” Wall Street Journal, July 15, 2019.
14. National Research Foundation, “Virtual Singapore,” Singapore government, November 7, 2018; William J. Holstein, “Virtual Singapore,” Compass, November 2015.
15. William Kucinski, “Maintaining the data-rich Pratt & Whitney GTF engine,” SAE International, October 23, 2018.
16. Michael (Mick) Snell, Service Strategy manager, Airservices Australia, interview, September 19, 2019.
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17. Jerome Boulet (digital strategy director at Bridgestone EMEA), and Hans Dorfi, PhD (director of digital engineering at Bridgestone Americas), phone interview, October 3, 2019.
18. Previously known as TomTom Telematics. Steven Schoefs, “Bye bye TomTom Telematics, welcome WebFleet Solutions,” GlobalFleet, October 1, 2019.
19. Christoph Pistek (head of Technology Sciences, Pharmaceutical Sciences R&D, Takeda), interview, November 7, 2019.
20. Human Cell Atlas, accessed December 5, 2019.
77 TREND SUMMARY DEFINITION
Reshaping human-machine connections through fe t v AI, neuroscience, and human-centered design. co ut o utin that re ate to ari e fro or de i erate influences emotion or other affective phenomena.
eurosc e ce can ro ide a dee er under tandin of an indi idua e otion and uncon ciou BY THE NUMBERS and i icit deci ion a in
SENTIMENT ANALYSIS NATURAL LANGUAGE 0
of on ter cu to er in VOICE a e oitte i ita ur e u e ANALYSIS FACIAL e otiona an ua e to CODING de cri e their connection EYE to fa ored rand TRACKING
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focus o eth cs incor orate t t the a ue e er e ce re ty of indi idua or ani ation and roader ociet into e erience
o a ind icard Affective Computing a rid e IT re Ti reu ich et a Exploring the value of emotion- driven engagement e oitte i ita a Human experience platforms
TREND SUMMARY DEFINITION
Reshaping human-machine connections through a-'fek-tiv / Human experience AI, neuroscience, and human-centered design. computing omputin t at relates to platforms arises from or eli eratel influences emotion or other affective phenomena. Affective computing changes the rules of engagement Neuroscience can pro i e a eeper un erstan in of an in i i ual s emotions an unconscious BY THE NUMBERS an implicit S YOU ENTER the last leg of a long drive home, a network ecision ma in of cameras, microphones, and sensors embedded A throughout your car monitors your facial expressions, voice, and the way you are using the car’s functionality. Analyzing SENTIMENT the inputs in real time, your car—using computer vision, voice ANALYSIS NATURAL recognition, and deep learning capabilities—determines that you LANGUAGE 60% are getting tired and distracted. In response, these AI-powered tools lower the thermostat and turn up the volume on the radio, and a conversational agent gently suggests you pull over or stop for a cup of coffee at a restaurant three miles ahead.1
of lon term customers in VOICE a eloitte i ital sur e use These technologies are engaging you—a human driving a car—in ANALYSIS FACIAL emotional lan ua e to human terms. Myriad technologies that detect physical states such CODING escri e t eir connection as alertness are increasingly being used to infer emotional states EYE to fa ore ran s such as happiness or sadness. Unlike their machine forebears that TRACKING set rigid rules of engagement, these systems will follow rules, Human-centered reading your mood, intuiting your needs, and responding in design rin s an contextually and emotionally appropriate ways. in i i ual s eliefs alues feelin s an am itions to TREND BREAKDOWN Welcome to the next stage of human-machine interaction, in which t e forefront a growing class of AI-powered solutions—referred to as “affective computing” or “emotion AI”—is redefining the way we experience technology. These experiences are hardly confined to automobiles. Retailers are integrating AI-powered bots with customer Cognitive segmentation and CRM systems to personalize customer interactions while at the same time capturing valuable lead- nurturing data.2 Apps are designing custom drinks and fragrances focus on ethics incorporates Digital Digital for fashion-show attendees based on emotional quotient (EQ) t e alues experience reality inputs.3 A global restaurant chain is tailoring its drive-through of in i i uals experiences based on changes in the weather.4 The list goes on. or ani ations an roa er societ into experiences As part of the emerging human experience platforms trend, during the next 18 to 24 months more companies will ramp up their
osalin icar Affective Computing am ri e ress im reulic et al Exploring the value of emotion- 79 driven engagement eloitte i ital a Tech Trends 2020
responses to a growing demand for technology to Time to get started. How will you create better understand humans and to respond to us emotionally insightful human experiences for your more appropriately. System users increasingly customers, employees, and business partners? expect the technologies they rely on to provide a greater sense of connection—an expectation that should not be ignored. In a recent Deloitte Digital Knowing me, knowing you survey of 800 consumers, 60 percent of long-term customers use emotional language to describe their In Tech Trends 2019, we examined how marketing connection to favored brands; likewise, 62 percent teams—by adopting new approaches to data of consumers feel they have a relationship with a gathering, decisioning, and delivery—can create brand. Trustworthiness (83 percent), integrity personalized, contextualized, dynamic experiences (79 percent), and honesty (77 percent) are the for individual customers. These data-driven emotional factors that consumers feel most align experiences, embodying the latest techniques in with their favorite brands.5 HCD, can inspire deep emotional connections to products and brands, which in turn drive loyalty Historically, computers have been unable to and business growth.9 The human experience correlate events with human emotions or platforms trend takes that same quest for deeper emotional factors. But that is changing as insights and connections to the next level by innovators add an EQ to technology’s IQ, at scale. broadening its scope to include not only customers Using data and human-centered design (HCD) but employees, business partners, and suppliers— techniques—and technologies currently being used basically anyone with whom you interact. in neurological research to better understand human needs—affective systems will be able to In addition to data, human experience platforms recognize a system user’s emotional state and the leverage affective computing—which uses context behind it, and then respond appropriately. technologies such as natural language processing, facial expression recognition, eye tracking, and Early trend participants recognize that the stakes sentiment analysis algorithms—to recognize, are high. The ability to leverage emotionally understand, and respond to human emotion. intelligent platforms to recognize and use Affective computing can help us achieve something emotional data at scale will be one of the biggest, truly disruptive: It makes it possible for us to be most important opportunities for companies going human at scale. What do we mean by that? Right forward. Deloitte Digital research reveals that now, true human connections are limited to the companies focusing on the human experience have number of people we can fit into a room. been twice as likely to outperform their peers in Technologies such as phones or webcams connect revenue growth over a three-year period, with 17 us to other humans but remain only a conduit, and times faster revenue growth than those who do connections made through technology conduits are not.6 Moreover, inaction could lead to more useful yet emotionally limited. “experience debt”7 and user alienation as AI applications make us all feel a bit less human. But what if technology itself could become more Chances are, your competitors are already working human? What if a bot appearing on the screen in toward this goal. Research and Markets projects front of our faces could engage us with the kind of that the size of the global affective computing emotional acuity and perceptive nuance that we market will grow from US$22 billion in 2019 to expect from human-human interaction? Today, US$90 billion by 2024; this represents a you may walk into a clothing store and barely compound annual growth rate of 32.3 percent.8 notice the screens mounted on shop walls,
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displaying items currently on sale; the ads aren’t • Neuroscientific research. This method particularly relevant, so you don’t give them a moves beyond traditional “soft science” market second thought. But imagine if you could walk into research approaches (surveys, questionnaires, that same space and a bot appearing on the screen data analysis, etc.) by deploying a variety recognizes you and addresses you by name.10 This of sensory recognition technologies to bot has been observing you walk around the store measure brain activity, eye movement, and and has identified jackets you might love based on other physical responses to stimuli. Analysis your mood today and your purchasing history. In of this data can give companies a deeper this moment, technology engages you as an understanding of individual’s unconscious individual, and as a result, you experience this and implicit decision-making processes. store in a very different, more human way. AI and (See sidebar, “Neuroscientific methods for affective technologies have scaled an experience measuring thought processes.”) with very human-like qualities to encompass an entire business environment. • Human-centered design. HCD brings the human being into focus. It starts with the premise that individuals’ beliefs, values, Designing for humans feelings, and ambitions are important because they form the foundation for who those The human experience platforms trend reverses individuals are and what they want from traditional design approaches by starting with the the organizations with which they engage. human and emotion-led experience we want to HCD involves using ethnographic research11 achieve, and then determining which combination and neuroscience to better understand of affective and AI technologies can deliver them. individuals’ unmet needs and using these The big challenge that companies will face is insights to improve service design and delivery. identifying the specific responses and behaviors Importantly, a design-led approach brings end that will resonate with—and elicit an emotional users into the room with stakeholders to engage response from—a diverse group of customers, in rapid prototyping, testing, and iteration employees, and other stakeholders, and then of solutions with the people for whom they developing the emotional technologies that can are created.12 recognize and replicate those traits in an experience. • Removing bias and emphasizing values and ethics. For experiences to resonate, Think about the abilities comprising empathy— they must reflect human values, such as among them, the ability to relate to others, the trustworthiness, integrity and honesty—all ability to recognize ourselves in a storyline, and the emotional factors that humans feel about their ability to trust and feel complex emotions. As favorite brands. But in the absence of ethical humans, we see these abilities in ourselves and, by consensus on so many aspects of cognitive and using our senses, we can recognize them in others. affective technologies, individual companies Today a growing number of companies are on human experience journeys should factor exploring ways to develop a deeper understanding ethical considerations—as well as their of the humans who will be using new technologies, organization’s values—into the development and to incorporate these insights into technology of their own AI solutions. As you build human designs. They include: experiences for your customers, employees, and business partners, ask yourself: What does ethical technology mean? How do governance
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NEUROSCIENTIFIC METHODS FOR MEASURING THOUGHT PROCESSES Two decades ago, neuroscience began investigating business-relevant questions by forming links with other disciplines such as economics and behavioral science. Today, this research plays a critical role in the human experience platforms trend. Using the following scientific methods—suggested by Deloitte Neuroscience Institute—to measure conscious and unconscious human thoughts, organizations can gain valuable insight into individuals’ desires and emotions. They can also test the effectiveness of the sensing and analysis tools.
Electroencephalography (EEG). Measures electrical brain activity with highly temporal resolution relating to perception and thinking processes.
Eye tracking. Tracks eye movements and gaze in real time to monitor visual focus (mobile and fixed- to-screen versions).
Facial coding. Measures facial expressions to identify emotional reactions.
Galvanic skin response. Measures skin conductance to monitor physiological arousal in response to external events.
Implicit association testing. Reveals implicit beliefs and attitudes that respondents usually do not report in traditional explicit testing methods like interviews and surveys.
and ethics overlap? Do the algorithms we natural language processing tools will be able to are creating align with our values and those recognize the nature of the employee’s query from of society in general? How can you build a list of things about which employees typically call. transparency into AI decision-making?13 And These tools also detect, based on the caller’s tone of how can you reduce cognitive bias in the voice, that she is agitated. With this information, development process by having more diverse an AI-powered customer service bot can deliver the teams be part of the design?14 (Note: For a scripted response most likely to defuse this specific deeper dive into the ethical dimensions of situation. The script may direct the bot to express technology development, check out the ethical empathy. All scripted responses are designed to technology and trust chapter of Tech Trends help AI systems engage the caller in a human way, 2020.) but also to keep the technology from violating the caller’s or the organization’s values. And the AI needs to know when to pass off the call to a human Implementing the experience operator. In this human experience, designers have set up operating parameters but have left it to Once targeted experience has been designed using affective tools and AI, working in tandem, to fill in a combination of neuroscience, HCD, and the the blank spaces with the optimum response. ethical guidelines and principles, it’s time to implement it. Companies need to leverage human This can pose a whole new set of challenges as experience platforms that use AI, machine choices must be made explicit. Organizations can learning, natural language processing, visual hire a human call center agent, give them a recognition, and other technologies that can be discretionary budget for returns or waived fees, combined to make the experience come to life. For and assume that they will employ decades of good example, if an employee contacts an automated judgment to dispense it. A virtual agent must be internal call center, AI-based voice recognition and instructed. Moreover, we expect our virtual agents
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SAMPLE AI TECHNOLOGIES SUPPORTING HUMAN EXPERIENCE PLATFORMS To support the ability to detect stress and emotion in human experience platforms, computers rely on a combination of text analytics, voice analytics, voice recognition and response, video analytics, and more. AI’s increasing ability to use video and voice to measure physical states and detect likely emotional states enables AI agents to respond more appropriately—mirroring mood, gestures, and tone.
Vision systems. Cameras and supporting algorithms to identity people, objects, surroundings, and extrasensory dimensions—thermal signatures, slow motion, ultra-zoom, long distance, and others.
Natural language generation. Generates appropriate responses and vocalizes them into human-like speech.
Natural language processing. Enables the processing of text to understand intent, questions, and queries.
Sentiment analysis. Analyzes text to detect overall sentiment toward topic—positive, negative, or neutral.
Voice recognition. Translates human speech into text for further processing.
Voice stress analysis. Measures relative stress levels to attempt to identify emotional reactions. to be unbiased—imagine if the virtual agent were seeing advanced use cases emerge in the discovered to be consistently waiving fees for one biopharmaceutical sector, exploring ways to use group and not another. Next, virtual agents need augmented reality and virtual reality in care context and history. Maybe the first penalty for late management.15 payment should be waived, but how about the second? Or the fifth? Finally, AI-powered agents In the coming months, we expect growing demand need a set of outcomes for which to optimize. If for technologies to become more human. We’ve they optimize for customer happiness, the agents reached a point in the digital revolution at which may waive all fees—an outcome that would surely everyone’s connected to technology but not please customers but might not be optimal for the necessarily to each other. We are disintermediating business. Ultimately, building rules to mimic processes and interactions and engaging directly “basic” human intuition is a tall order. with machines. It is unsurprising, then, that we crave what we are rapidly losing: meaningful connections. In response, we increasingly expect Now connecting technology to treat us in more human—and humane—ways. Designing technologies that can The work of making technology more human is meet this expectation will require deeper insights hardly new. Voice assistants that only a few into human behavior, and new innovations that Christmases ago were the coolest gift under the tree enhance our ability to anticipate and respond to are now ubiquitous, and the kiosk bots that engage human needs. But the incentive is there. In the mall shoppers in amusing ways today will soon be near future, human experiences will likely deliver a old news. And there are much bigger human durable and lasting competitive advantage. experience initiatives underway. We’re already
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LESSONS FROM THE FRONT LINES
Digital experience investment strengthens UBS client-adviser connections
N A BUSINESS built around human interaction UBS leveraged its financial advisers’ deep reservoir and high-touch advisers for high-net-worth of client knowledge, collecting and incorporating Iclients, UBS seeks to balance the human their feedback into the creation process. It also experience with the digital experience. As part of brought clients into the design process, seeking its digital journey, UBS changed how its high- to recognize and adapt to customer behaviors and net-worth and ultra-high-net-worth clients invest preferences through end-user testing and research. and manage their finances, develop investment The design team examined investment strategies, strategies, and engage with UBS financial advisers. buying patterns, personal aspirations, and consumer choices to understand client definitions With a recently launched mobile app, the of wealth, key financial goals, and important investment firm’s primary goal was to create a milestones and achievements. digital experience that felt high-touch and human, according to Kraleigh Woodford, head of digital At the heart of the app is an AI-driven client experience at UBS Wealth Management personalization engine. To calibrate and customize USA.16 UBS also wanted it to help deepen the client experience, the app asks questions relationships between clients and financial advisers that allow clients to share information about by using technology to deliver a more holistic their specific interests, concerns, and long-term wealth management experience. needs. It also incorporates information about their philanthropic interests, individual goals, and UBS knew it needed to boost client-facing important people and relationships. An algorithm technology to incorporate personalized experiences identifies tailored wealth management content and hands-on interactions. But at the heart of its so that clients receive a curated selection of wealth management business are financial advisers investment and financial information. and their teams, who have cultivated deep, long- standing client relationships and connections. Research indicated that clients wanted to share Recognizing that any technology solution should more data with advisers but didn’t know the not disrupt the adviser-client bond, they sought best way—and didn’t want to take up too much to create a solution that would supplement and of their advisers’ time. To address this challenge, enhance rather than supplant these relationships. client information and insights flow directly into adviser-facing systems. Using data from the app, To meet these objectives, UBS required a advisers can initiate conversations about wealth- development process that was emotionally building and personal goals and strategies, thereby sensitive to the needs of its clients and advisers. enhancing ongoing client-adviser relationships. The firm adopted an agile, business-led approach to product development, colocating business Woodford says that since launching the app and technology teams to help ensure successful in March 2019, half of the clients using it have incorporation of both adviser and client feedback. shared their interests and concerns to create a
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more tailored experience; a quarter have shared This allowed us to balance practical needs such important milestones in their investment journeys. as accelerating growth with emotional needs such And UBS has realized a significant uptick in the as supporting the client-adviser relationship,” number of high-net-worth and ultra-high-net- Woodford says. “We will continue to focus on this worth clients using the app compared to the web lesson.” portal. “Our motto was ‘People first, then product.’
Brain-computer interfaces improve wellness and performance by tracking emotions
URING AN EXTENDED shift, an air traffic EMOTIV develops EEG-based wearable brain- controller is handling a high volume of computer interface systems that can be used to Dpassenger jets and private planes. The day monitor cognitive performance and emotional has been chaotic and stressful, with a couple of reactions to inform workplace wellness, learning, unexpected police and medical helicopter landings safety, and productivity and capture consumer and a drone that deviated from its intended flight insights. path. The controller hasn’t taken a break in several hours and is feeling fatigued. She tries to focus EMOTIV has miniaturized wireless EEG systems on the radar system, but it sends her a message: and machine learning–based neurotechnology to “Christina, it’s time for a break. Let’s find someone develop a wearer-friendly form factor that detects to cover for you.” brain activity as accurately as laboratory EEG caps that prevent mobility—and are neither stylish nor The air traffic controller is wearing brain-sensing comfortable. The company’s MN8 device looks earbuds that contain electrodes measuring her and functions like standard Bluetooth earbuds, brain’s electrical activity. Upon analyzing these but squeezed inside is a mobile EEG lab that can electroencephalographic (EEG) signals—the same measure and analyze levels of stress and distraction ones used by doctors to understand brain and provide the wearer—or other connected (dys)function—machine learning algorithms systems—with feedback on how to optimize detected increased distraction and stress in the wellness and performance. controller’s brain activity patterns and decided that she needed a pause. Digital EEG signals are interpreted immediately using real-time analysis; optionally, they can be A long-established medical and research tool, EEG sent to the cloud for more advanced analysis and allows physicians to establish medical diagnoses storage of the data at scale. EMOTIV’s machine and enables researchers to understand the brain learning algorithms have been trained to identify dynamics underlying human decision-making and classify neuro-markers for different cognitive processes and behavior. It can also help individuals and affective states by a decade of EEG data sets. improve wellness and performance, says Professor Data has been accumulated through both scientific Olivier Oullier, president of EMOTIV, a leading studies involving thousands of volunteers who neurotechnology and bioinformatics company.17 were taken through various experiences to prompt
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different levels of the desired brain state18 as well As in the case of the air traffic controller, as from nearly 100,000 neuroheadsets owners organizations can leverage real-time analysis of that volunteered to share their real-life data cognitive data to improve individual employee anonymously with the company. wellness, performance, productivity, and safety by instructing workers to take breaks when they’re Insight into exactly how people’s brains are tired, changing the difficulty or the format of an reacting and evolving moment to moment, over interactive training or onboarding process when an time and in context of their actions, can be more employee is unfocused, or switching the employee valuable than self-reporting of emotions via to a less stressful task. written survey or verbal response. Self-reporting is important but doesn’t paint a complete picture, Companies can also mine the aggregated data to since answers represent only a single moment in understand behavioral and work patterns. Taking time and are often influenced by what people think these patterns into account, they can optimize others want or expect them to say. workflows and procedures—for example, by building more breaks into workers’ schedules, “Until recently,” Oullier says, “stress, focus, mental changing shift hours to avoid stressful commute fatigue or cognitive load were challenging to times, or moving the time of a meeting that measure scientifically and rigorously. In fact, they requires high levels of employee attention. “Brain are cognitive and affective states that can now be data can shed light on the types of environments detected by EEG neurotechnology. Quantifying and situations that allow employees to flourish these cognitive states in real time and in real-life so that workplaces can adjust,” Oullier says. situations such as in the workplace finally bridges “The purpose is to leverage neuroinformatics to the gap between perception and reality that personalize the work experience thanks to dynamic exists when people self-report what they feel and workplaces and systems that are more responsive experience.” to what employees feel.”
Smart, sensitive, and efficient: A cognitive agent even a curmudgeon can trust
IRTUAL AGENTS ARE increasingly the incorporate intelligent systems with affective first points of contact for customers or computing—what some call “cognitive agents.” Vemployees who need help or information. IPsoft19 says, “What’s valuable about a cognitive When communicating with a machine, few callers agent is that it can help build trust,” which expect more than an efficient way to get a fast encourages humans to use it for increasingly answer to a simple question. But expectations are complex issues. The company sees three steps changing as some companies look to combine a that cognitive agents need to perform effectively virtual agent’s efficiency with the problem-solving to establish trust: demonstrate understanding, capabilities and emotional connections that a classify the issue, and select appropriate next steps. human agent can provide. First, demonstrating understanding—especially Increasingly, these companies are investing in when encountering human emotion—is one of sophisticated virtual support platforms that the main use cases for cognitive agents. In many
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enterprise settings, human and cognitive agents are trained to follow a script when responding It’s possible that with to questions and requests. Human agents tend appropriate training, to instinctively mirror callers by expressing a sentiment that demonstrates understanding, such a cognitive agent can as, “I’m very sorry to hear that” or, “Oh, that’s perform as well as or, great!” After mirroring the emotion, the agent tries to move on to the next step in the script. perhaps, even better Cognitive agents use advanced AI techniques such than a human agent. as sentiment analysis in order to detect and mirror emotion before moving on through the script. will mirror emotions through sympathetic facial Second, cognitive agents can learn to automatically expressions. The company is also experimenting identify and classify issues using AI text analysis with voice and video biometrics to enhance and natural language processing (NLP). Episodic Amelia’s ability to discern human emotions by memory enables cognitive agents to recall comparing a person’s voice or expression against a information that may be required later in the normal baseline; when people feel tense or upset, conversation, avoiding the need to assume their voices or expressions typically change. information or repeat a question. Recent improvements in NLP will equip cognitive IPsoft advises organizations that are planning to agents to handle new phrases, utterances, and use a cognitive agent to observe and learn how colloquialisms. All together, these will help their most effective human agents work with a cognitive agents better understand and classify diverse range of customers and situations, to issues. study how they follow scripts and respond to customer emotions, and use these insights to train Finally, as companies learn to trust the ability of models and create standard operating procedures cognitive agents to classify underlying issues and for their cognitive agent. They also suggest that select appropriate next steps, fewer are transferring organizations consider giving experienced human customers to human agents. Not only can a and cognitive agents more latitude to make cognitive agent develop skills for handling negative judgment calls. emotions—it can develop the ability to identify ways to increase customer loyalty, such as selecting It’s possible that with appropriate training, qualified and amenable customers for upsell and a cognitive agent can perform as well as or, cross-sell opportunities. And cognitive agents perhaps, even better than a human agent because can increasingly detect when a customer should it is encountering and learning from many more be escalated to a human agent, whether based customer situations than a human is likely to on the company’s policies and rules, detection of encounter. And the agents are available 24/7 extreme negative emotions, or issues arising due to and can react to increases in demand by simply regulatory, audit, adjudication, or judgment calls. adding more computing power. The goal is not to fool customers into thinking they’re dealing with IPsoft has incorporated mirroring into the text a human agent—it’s about providing faster, more and voice recognition capabilities of its cognitive efficient service that builds customer trust and agent, Amelia. Now, the company is working on loyalty. a next-generation appearance for video calls that
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MY TAKE
FEW YEARS ago, Anthem adopted a goal of providing world-class consumer experiences while improving members’ health and well-being. We also sought to deepen our relationships with A members of our affiliated health plans.
To do this, we needed to provide frictionless, consumer-centric interactions, which required us to enhance and expand our engagement skills as well as increase the level of emotional intelligence with which we approached health plan members.
We’re leaning heavily on advanced predictive data analytics, cognitive ANIL BHATT technologies, and augmented reality to achieve these goals. For example, CHIEF EXPERIENCE OFFICER, to create a more stress-free service experience, we’ve made significant ANTHEM investments in digital assistant technologies, predictive modeling with voice recognition, natural language processing, voice pattern identification, and sentiment analysis to analyze and predict consumer emotion and feedback in real time. This allows us to improve customer service as we engage with plan members across their preferred channels, especially as the ongoing growth of digital voice assistants signals an increasingly voice-oriented future.
With access to detailed data from a consumer’s health insurance plan, our digital assistant provides personalized engagement and helps health plan members complete administrative tasks. The digital assistant technologies can identify when a person is growing frustrated, determine that it’s time to route the customer to a human customer service representative, and does just that. This effort has helped us achieve higher customer satisfaction scores and task completion rates on our various portals and mobile apps, and our customer service center has demonstrated measurable improvements in first call resolution and average handle time.
We’ve also sought to help health plan consumers lower their likelihood of future illness in part by deepening relationships with them. Historically, individuals contacted us primarily to ask administrative questions about plans, premiums, benefits, or claim status. But we have the experience and know-how to have more meaningful member relationships, expanding our role from that of a health care administrator to that of a health care adviser that can help plan members choose healthier lifestyle options and guide them toward appropriate preventative care.
We do this by understanding their current health concerns and challenges and proactively designing and delivering tailored programs that build on our long-standing use of data-driven insights and cognitive technologies. Using predictive data models, we can identify individuals at risk for negative health outcomes and create personalized coaching and intervention programs—including follow-up care, social support, positive messaging, education programs, and health care advice—that help them better manage a disease. We can also turn the case over to a care provider who can work with the person to lead a healthier life.
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In addition, augmented reality technology is helping us simplify the consumer experience. We get it: Nobody enjoys reviewing or completing applications and enrollment forms or insurance claims. So we’re testing an AR-based mobile app to reduce some of the apprehension associated with reviewing and completing complex documents and forms. Using a mobile device camera, the app converts insurance-centric language into more commonly used phrases and terms, helping consumers quickly identify important information and visualize where to sign or initial forms. This has helped speed the process of reviewing and completing forms, reducing member frustration.
As Anthem transforms to a digital-first organization focused on enhancing the consumer experience, we’ll continue to explore innovative ways to reduce the stress and frustration in consumer interactions and develop more meaningful relationships with health plan members. By leveraging advanced data analytics, cognitive technologies, and AR to deliver valuable, frictionless experiences and interactions, we can become a trusted health care partner that enables healthier lifestyles.
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EXECUTIVE PERSPECTIVES is inance trate
is inance trate is inance trate
STRATEGY FINANCE RISK
CEOs and other strategy leaders Targeted investments in The kind of intuitive, emotionally immerse themselves in every technologies that continually intelligent human experiences to aspect of the client experience to improve the user experience can which leading organizations are become the ultimate client offer a clear value proposition. shifting will affect ongoing risk champions and end-user AI-based technologies are management efforts in areas ethnographers. What are improving the detection of such as operations, marketing, customers’ most subtle habits, human emotion through finance, and management. The desires, and subconscious sentiment analysis, voice stress big difference going forward will concerns? With a nuanced measurement, and facial be data—enormous volumes of understanding of these factors, expression detection. And highly personal data that reveal CEOs can champion intuitive machine learning can help people’s emotional states, the human experiences by pushing identify the likely cause for user real-time contexts of their data to its maximum limit and contact—or even suggest a interactions, and their life stories. setting the highest standards for proactive outreach. With these In this environment, the potential execution. While machine changes, intuitive bots can for fraud and identity theft may learning and AI promise better increasingly handle user contacts grow. How can cyber and risk signal detection, they are far that traditionally required human leaders adequately protect from a complete solution to this agents. Consider funding myriad types of data that challenge. Human experience exploratory efforts or insisting organizations have never platforms, by combining context that IT help other leaders identify captured before, such as (status of current account/order/ potential use cases, benefits, and information generated by eye- payment), emotional state ROI. Expect use cases to tracking platforms and (inferred by sentiment detection, proliferate as enterprise exoskeleton gait analysis? voice stress analysis, facial functions recognize Likewise, human experience data expressions, and more), and opportunities to reposition introduces a web of ethical interaction proclivities (inferred products and services by making issues. Human experience data by customer history) can help user experiences more will be harvested, analyzed, optimize the end-user experience emotionally intuitive and context- aggregated, and used in various across channels and interactions. appropriate. Some of these ways to support differing This, in turn, can help create a opportunities will likely involve enterprise strategies. Are there more consistent human transforming existing business limits to the kind of data experience for all. strategies and value streams. At companies will not collect? Are this stage, the value propositions there limits to the ways in which that human experience companies will use collected investments offer become more data? And who owns aggregated complex—and more compelling. data? Expect the scope and complexity of risk management to grow as leaders try to answer these and similar questions.
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ARE YOU READY?
LEARN MORE
What experience do you want your customers, employees, and partners to have when they engage with your organization? 1 EMOTION-DRIVEN What company values do your ENGAGEMENT experiences convey? Learn why the ability to use emotional data Which of your existing customer at scale represents digital interactions could be pilots one of today’s biggest for demonstrating emotional and business opportunities. 2 contextual understanding with affective computing?
How are you piloting human- centered design, ethical technology, and neuroscientific AI & COGNITIVE 3 research capabilities to shape TECHNOLOGY the development of your human Explore how cognitive experience platforms? technologies can help leaders make wise strategy and technology choices.
BOTTOM LINE
The human experiences platforms trend is fueled by a growing demand from system users that technologies engage us in PAYING DOWN THE more meaningful, human-like ways. In the coming years, we EXPERIENCE DEBT expect this demand to become a nonnegotiable expectation. Read how leading brands Today, trend pioneers are integrating affective computing, AI, use their values to elevate and neuroscientific research into their strategies and systems the human experience. to transform the rules of user engagement. In the near future, “emotionally intelligent” technologies and tactics will likely give rise to new business models and ways of working. When that day comes, companies that didn’t get around to developing their own human experience platforms could find themselves at a significant competitive disadvantage.
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Authors
TAMARA CIBENKO is a principal with Deloitte Consulting LLP and leads the US Digital Experience practice. As a US Air Force veteran and a passionate advocate for the human experience, she focuses on the intersection of business, technology, and experience. Cibenko has spent over 15 years with Deloitte, leading large-scale complex digital transformation programs across industries. Her current program is focused on the intersection of digital and physical to enable a truly seamless end- to-end experience.
AMELIA DUNLOP is the chief experience officer for Deloitte Digital and leader of the US Customer Strategy and Applied Design practice for Deloitte Consulting LLP. She helps companies develop winning strategies that combine innovation, creativity, and digital strategy. Using human-centered design and customer insights to shift focus from the customer experience to the human experience, Dunlop helps clients create solutions and build organizational momentum to turn the future they imagine into reality.
NELSON KUNKEL is the chief design officer for Deloitte Digital and leads the growth of Deloitte’s experience design teams across a network of global studios. He has spent a career building brands across multiple industries and holds several design patents; several leading publishers on brand design and digital experiences have released his work. Having traveled the world as an entrepreneur, Kunkel is obsessed with learning from others, collecting stories, and finding relationships between ideas.
SENIOR CONTRIBUTORS
Scott Mager Robbie Robertson Principal Partner Deloitte Consulting LLP Deloitte Touche Tohmatsu
Steve Rayment Tânia Conceição Partner Manager Deloitte Touche Tohmatsu Deloitte & Associados, SROC S.A.
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Endnotes
1. Affectiva.com, “Emotion AI overview: What is it and how does it work?”; Rana el Kaliouby, “Building emotionally aware cars on the path to full autonomy,” Venture Beat, February 11, 2017.
2. Laduram Vishnoi, “How AI changed customer service in the IT industry,” Entrepreneur Magazine, February 17, 2018.
3. Julia Muro, “At New York Fashion Week, this hi-tech experience steals the show,” Forbes, September 4, 2019.
4. Anthony Ha, “McDonald’s is acquiring Dynamic Yield to create a more customized drive-thru,” TechCrunch, March 25, 2019.
5. Tim Greulich et al., Exploring the value of emotion-driven engagement, Deloitte Digital, May 8, 2019.
6. Amelia Dunlop et al., We’re only human: Exploring and quantifying the human experience, Deloitte Digital, August 7, 2019.
7. Ibid.
8. Research and Markets, “Affective computing market by technology, component, vertical, and region, Global Forecast to 2024,” November 2019.
9. Angel Vaccaro et al., Beyond marketing: Experience reimagined, Deloitte Insights, January 16, 2019.
10. Companies have used some elements of biometric advertising for several years. Shawn Patrick, “Twelve years later, ‘Minority Report’ advertising is here,” Recode, April 28, 2014.
11. Kelly Moran, “An ethnographic approach to software,” Methods and Tools, Fall 2015.
12. Tiffany Fishman et al.,Elevating the human experience, Deloitte Insights, October 30, 2019.
13. Nitin Mittal, Dave Kuder, and Samir Hans, AI-fueled organizations, Deloitte Insights, January 16, 2019.
14. Kavitha Prabhakar, Kristi Lamar, and Anjali Shaikh, Innovating for all: How CIOs can leverage diverse teams to foster innovation and ethical tech, Deloitte Insights, November 18, 2019.
15. Alex Keown, “Could augmented reality benefit patient experience in managing healthcare?,” BioSpace, July 5, 2018.
16. Kraleigh Woodford (head of digital client experience, UBS Wealth Management USA), phone interview with authors, October 9, 2019.
17. Olivier Oullier (president, EMOTIV), phone interview with authors, November 20, 2019.
18. EMOTIV, “The science behind our technology,” accessed December 9, 2019.
19. Chris Butler (chief product architect, IPsoft), interview with authors, November 27, 2019.
93 TREND SUMMAR Y D E F INIT I O N
Evolve the role of architects to transform systems r ә te t n i i uals responsi le for architecture and support the speed of business. t e esi n implementation an o ersi t of tec nolo components applications an infrastructure an t eir respecti e interactions eep experts in t eir omains R E D E F INE T H E t e are often responsi le for R O LE OF TH E finding a path to the future. A RCHIT ECT
olla orati e responsi e an creati e arc itects B Y THE N UMBERS it a i picture ie can ri e tec nolo an usiness to eli er alue R EIMAGINE T HE S T A C K
e uce tec nical e t 10 an emp asi e autonomics microser ices an a ilit
of eloitte ec xecs riefs e cast respon ents sai t eir or ani ation as s ille architects in sufficient uantit report aps FOSTE R in s ills or ea count C OMMUNIT Y
reate communities TREND B R E A K DOW N ere arc itects can s are est practices
us ess of tech o o y
s ore
ou
eloitte riefs e cast e future of arc itecture esi nin a foun ation for ro t eloitte cto er Architecture awakens
TREND SUMMAR Y D E F INIT I O N
Evolve the role of architects to transform systems r ә te t Architecture n i i uals responsi le for architecture and support the speed of business. t e esi n implementation awakens an o ersi t of tec nolo components applications an infrastructure an t eir Let the evolution begin respecti e interactions eep experts in t eir omains R E D E F INE T H E t e are often responsi le for R O LE OF TH E finding a path to the future. A RCHIT ECT
olla orati e responsi e HE ARCHITECTURE AWAKENS trend is a direct response B Y THE N UMBERS an creati e arc itects to external pressures many CIOs face today. Innovation it a i picture ie can ri e tec nolo an T continues its disruptive march across business and usiness to eli er alue R EIMAGINE technology landscapes. Young companies—largely unburdened by T HE S T A C K legacy systems and technical debt—are moving quickly to harness digital advances. And some established organizations are struggling to keep pace, with IT systems that increasingly seem slow, rigid, e uce and expensive. Deloitte’s 2018 Global CIO Survey found that only tec nical e t 10 an emp asi e 54 percent of CIO respondents thought their organization’s existing autonomics technology stacks are capable of supporting current and future microser ices business needs.1 an a ilit
of eloitte ec xecs riefs Growing numbers of technology and C-suite leaders are e cast respon ents sai recognizing that the science of technology architecture is more t eir or ani ation as s ille architects in sufficient strategically important than ever. Indeed, to remain competitive in uantit report aps markets being disrupted by technology innovation, established FOSTE R in s ills or ea count organizations will need to evolve their approaches to C OMMUNIT Y architecture—a process that can begin by transforming the role technology architects play in the enterprise.
reate communities TREND B R E A K DOW N ere arc itects can In the coming months, we expect to see more organizations move s are est practices architects out of their traditional ivory towers and into the trenches. These talented, if underused, technologists will begin taking more responsibility for particular services and systems—and us ess of will become involved in system operations. The goal of this shift is tech o o y straightforward: to move the most experienced architects where they are needed most—to software development teams that are designing complex technology. Once redeployed and empowered to s ore drive change, architects can help simplify technical stacks and create technical agility that currently gives younger competitors a ou market advantage. They can also be held directly responsible for achieving business outcomes and resolving architectural challenges.
eloitte riefs e cast e future of arc itecture esi nin a foun ation for ro t eloitte cto er 95 Tech Trends 2020
Moreover, companies embracing the architecture bigger picture in terms of operating and awakens trend will begin redefining the architect managing complex system landscapes such as role to be more collaborative, creative, and hybrid, multi-cloud, and edge workloads. responsive to stakeholder needs. Big-picture Architects can also help define how DevOps and architects may find themselves working in the NoOps architectures and practices should be trenches on multidisciplinary project teams with structured and help drive the cultural and application-focused architects and with colleagues training efforts needed to make the from IT and business. Going forward, their mission initiatives successful. will be to do bold new things not only with traditional architectural components but with • Becoming more accountable for solution disruptive forces such as blockchain, artificial outcomes. Architects—like everyone else in intelligence (AI), and machine learning. IT—should be able to thrive within constraints of budget, schedules, and skill shortages. As The architecture awakens trend is grounded in a architects begin working more closely with business logic that CEOs, CFOs, and brand leaders fast-moving development teams, their remit understand: Investment, careful planning, and will expand to include designing for the specific nurturing can make a company grow. And architectural and technology needs of individual investing in architects and architecture and projects. For architects unaccustomed to promoting their strategic value enterprisewide can working “in the weeds” with front-line evolve the IT function into a competitive technologists, this represents a sea change in differentiator in the digital economy.2 approach. Architects, along with the rest of the team, should be held accountable for overall project outcomes. Architects go big • Increasing developer productivity. IT How do enterprise teams use architects today? Do leaders can enhance developer productivity by they use them because they have to, or because building architectural concerns into off-the- architects make their lives easier and projects more shelf tools and languages, thus removing any impactful? A big metric of success for architects is need for developers to make architectural that enterprise teams want to work with them. decisions. The work of tailoring developer tools Unfortunately, in some IT organizations architects and languages requires hands-on collaboration rarely work shoulder to shoulder with their between architects and developers with business or even IT peers. To transition from architects obliged to stay grounded and current “doing architecture” to delivering value, architects in a rapidly changing technology landscape. should be given opportunities to work in different ways, develop their skills, and become recognized • Balancing business and technology leaders in their technology discipline. priorities. To the nontechnical business laity, architects can seem more like academics than These opportunities include: technologists. Their proposals, while conceptually sophisticated, may be unbounded • Driving agility and speed-to-market. by real-life constraints of time and budget. As As technology complexity and the pace of the architecture awakens trend picks up steam, innovation accelerate, architects can play an architects will work to become more fluent in instrumental role in helping to understand the the goals and strategies of the business so that
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they can credibly make tradeoff decisions that Reimagining the balance technology and business priorities. technology stack Without this broader understanding of business, the architect’s role—and influence in Incumbents not “born in the cloud” often find the broader enterprise—will be limited. themselves hamstrung by decades of legacy technology that suffers from system and • Optimizing operating costs. As organizational inertia. In this environment, IT organizations migrate to the cloud, there are a leaders struggle to deliver new capabilities within variety of different options with differentiated timeframes that the business demands. cost profiles and degrees of vendor lock-in to consider. Choosing infrastructure-as-a-service, platform-as-a-service, software-as-a-service, or function-as-a-service can lead to orders-of- magnitude differences in operational costs, depending on the nature of service/system usage and access patterns. System designers will increasingly need to move from static cost sizing and estimation to more dynamic of Deloitte Tech Execs predictions as part of the system design process. Dbriefs webcast
• Spreading architecture’s message. It’s not respondents said that in uncommon for architects to feel that their the future, architects at companies underinvest in architecture. The unfortunate reality is that architecture will their organizations “will be likely remain underfunded if architects cannot expected to be both more effectively make a strong business case for investing in architecture by connecting its value technically specialized, to specific business outcomes. They need to quantify the value of the business agility, and more attuned to the product offerings, and innovative services that enterprisewide landscape.” architecture enables—and spread architecture’s message across the organization. In response, forward-thinking companies are The good news is that many IT leaders are already rebuilding their technology stacks by emphasizing thinking about ways to grow their architects’ roles. autonomics, instrumentation, and cloud-native During a recent Deloitte Dbriefs webcast titled tooling. What’s more, they embrace Agile “The future of architecture: Designing a foundation techniques and flexible architectures that can help for growth,” more than 2,000 CIOs, CTOs, and them compete in a rapidly changing world.4 The other technology leaders were asked to describe the urgent need to build and maintain the kind of future scope of the architect role in their technical agility that currently gives younger organizations. Forty-two percent said that competitors a market advantage is the primary “architects will be expected to be both more force that will drive the architecture awakens technically specialized, and more attuned to the trend over the next 18 to 24 months. enterprisewide landscape.”3
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This imperative means that transforming your limitations of various technologies—think technology stack is not optional. Future-forward cognitive agents, computer vision, or technology stacks should include DevOps and quantum—and how they could potentially affect archi- NoOps concepts, and utilize open-source tecture designs. technologies.5 Importantly, the transformed stack can help lower interest payments on technical debt, • They help development teams identify optimum which will likely go a long way in helping IT create technologies for a variety of business use the budgetary headroom needed to deliver new cases—and the specific skill sets needed to digital products and services. eventually execute on these cases. For example, evaluating open-source options requires These kinds of changes won’t come cheap. But to different kinds of analysis, since open-source make them more financially manageable, leaders developers don’t generally invest in responding should consider creating explicit budget lines for to feature checklist requests. technology stack items, with business cases. Automated cloud management services, AI • Exploratory projects can help IT and business workbenches, code quality scanning services, leaders get a jump on the competition by regression test beds, and other architecture uncovering new opportunities to reinvent the investments can potentially increase efficiency and business and identify areas that are vulnerable thereby accelerate delivery, lower costs, and more. to disruption. With this information, decision- The goal should be to shift from best practices to makers can develop strategies for countering deployable patterns, platforms, and tools. disruption (for example, acquisition versus build), for disrupting markets themselves, and for creating the architectural agility needed to It’s not difficult to pursue these objectives.
recognize a causal It’s not difficult to recognize a causal relationship relationship between between investing in technical agility and any number of potential strategic and operational investing in technical benefits. For example, a flexible, modern agility and any number architecture provides the foundation needed to support rapid development and deployment of of potential strategic and solutions that, in turn, enable innovation and growth. In a competitive landscape being redrawn operational benefits. continuously by technology disruption, time-to- market can be a market differentiator. In this light, Finally, consider funding exploratory projects that consistently funding technology stack bring together small multidisciplinary teams modernization initiatives—while remaining comprising business experts, architects, and mindful of tradeoffs—may be well worth the engineers, tasked with recreating existing business investment. solutions using new technologies. Bounded, time-boxed research projects such as these can enhance technology strategies in a number of ways: Architects reach fighting trim
• They help IT leaders and stakeholders develop a As the roles of architects and the architecture better understanding of the strengths and function itself evolve, it will be important to
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FIGURE 1
Trends in architecture at a glance: Elevated mission and mindset
Aspect 1990s–2000s Today
Scope Technology only Business and technology
Mission Technology standardization Business transformation
Style Portfolio governance Collaborative and engaged
Approach Analysis and modeling Agile problem-solving
Control Strict governance Guidance over governance
Business impact Indirect Direct and maximized
Source: Deloitte Dbriefs webcast, “The future of architecture: Designing a foundation for growth,” Deloitte, October 3, 2019.
preserve some aspects of the status quo. For opportunities to mentor younger IT talent may example, even though architects may be working soon become a CIO’s most effective means for primarily as part of product and service teams, they meeting the staffing demands of tomorrow. will still need to connect with one another. CIOs should consider creating online and on-site With disruptive change happening at an unprec- communities where architects can share in-the- edented pace, planning architecture deliberately trenches learning, bounce ideas off of each other, has become critically important. Three decades and align their approaches to solution shaping and ago, a small number of technology architects put enablement. As an alternative, they could create a in place architectures that have enabled their matrixed organization in which architects report to companies to continue processing transactions product teams and a centralized architecture to this day. Of course, few things in the world of function. In this model, architects can meet local enterprise technology last decades, much less delivery needs while continuing to share best several decades. But the question bears asking: practices with colleagues. Either way, the How can we build our systems today to important thing is to recognize and sponsor accommodate the innovation and disruption valuable technologists. It’s not just a matter of that will surely continue for decades to come? By helping them succeed in the near term. In today’s architecting them effectively. And who can do that? IT talent market, demand for technology engineers Architects. already exceeds the supply, which could put many architectural transformation initiatives at risk.6 Architecture has awakened. Let the evolution Providing experienced architects with begin.
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LESSONS FROM THE FRONT LINES Enterprise architects get an upgrade
N A MARKET disrupted by the rise of flexible smaller team now have a more strategic role. They lodging alternatives, hospitality companies are focus primarily on the first implementation of I transforming operations to meet guest demand every technology architectures expected to drive for technology-driven services, conveniences, and strategic change across the enterprise, such as experiences. For example, in the last five years, event-driven architecture, cloud, containerization, InterContinental Hotels Group (IHG) launched microservices, and other future-looking a cloud-based guest reservation and revenue technologies. management system, created a common user interface across all hotel-facing applications, and embraced an advanced analytics solution Enterprise architects that enables real-time use of structured and work hand in hand with unstructured data. project solution architects To make the multinational hospitality company and lead developers to a more agile and responsive business partner, IHG’s IT team is modernizing processes and deliver and ensure the architectures. Cynthia Czabala, IHG’s VP of Enterprise Services, recognized that changes to the success of the initial deployment and usage of architects could enable project implementation. rapid adoption of strategic technologies, which would more effectively support the company’s In addition, the EAs who remain in Czabala’s business goals.7 “We needed a systematic process centralized team are no longer required to be that would align us more closely with business chargeable resources, freeing them from the priorities, allow us to rapidly evaluate and deploy constraints of project billing and allowing them to technologies, and improve the efficiency of focus on the strategic work of vetting technologies, enterprise and solution architects and developers,” determining how they should be operationalized she says. and governed, and delivering enterprisewide guidelines and reference models. No ivory towers Czabala changed the deployment model for here, though: EAs work hand in hand with project enterprise architecture, shifting the roles, solution architects and lead developers to deliver responsibilities, and reporting lines of enterprise and ensure the success of the initial project architects (EAs). Two-thirds of the EAs, originally implementation. part of her centralized team, were moved to serve directly on technical projects, managing business Armed with the EAs’ standardized reference requirements and architectural approaches. models and road maps, development teams are Czabala pushed them out to the lines of business empowered to design and implement future to help them better understand plans and deployments of these technologies, without priorities. The remaining EAs in the central, duplicating development work or circumventing IT
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processes. “We trust development teams to follow EAs are far more strategic now that they’ve the guidelines and standards without watching switched their focus from developer oversight and over them,” Czabala says. governance to planning and implementing IHG’s future architecture. And they enable Czabala’s All of the architects maintain a sense of community entire team to be more strategic as well. “Being and stay in close contact via weekly architecture closely aligned with the business and having forums for sharing information on new concepts resources that are looking forward allows us to and approaches, EA-led working groups charged develop an enterprise architecture roadmap that with building out standards and reference models, can evolve at the pace required by the business,” and bimonthly town halls that provide specific she says. “Working hand in hand with business details about new coding techniques, tools, teams to define and support business strategy helps and technologies. us be more efficient at prioritizing investments and planning projects.”
Enterprise architects set the direction at Thomson Reuters
N A BID to redefine how it competes and processes and reusable capabilities, systematize innovates, Thomson Reuters is seeking new and speed innovation, and maximize the value of I ways of designing and building agile, adaptable its technology assets across the enterprise. This enterprise architecture. The company’s technology included a cultural transformation to recalibrate team is rallying resources and investments the role of architects to bring both the voice around digital platforms and defining common, of the customer and a business perspective to reusable capabilities and services. In addition, the architecture development and forge deeper multinational media and information company is connections between technology operations and transforming its operational and organizational system design. structures, says Jason Perlewitz, director of technology.8 Previously, architects, developers, and operational support were siloed into separate teams that were Thomson Reuters’ journey began a couple of years not closely aligned; the architect’s role was to ago, when it began migrating legacy data center ensure technology standards and modern practices systems and applications to the cloud; with an even were incorporated into the technical direction of mix of native cloud-built applications and legacy an entire suite of applications. Thomson Reuters data-center applications, the company is now at integrated these groups into smaller, agile teams about the halfway point. The company adopted responsible for a single application or specific a business-centric approach to technology that reusable component, embedding architects in emphasized overarching corporate strategy and individual teams. integrated business partners into the architectural decision-making process. Architects are still technology direction-setters who partner with developers and other technologists, As part of this holistic approach, Thomson Reuters but they’re also responsible for the integration of sought to restructure its technology organizations the application and its operational fitness. Leaders to optimize the development and use of common evaluate and incent them not just on traditional
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technological capability metrics but on operational and foster a sense of community. To support the and business measures that provide an indirect culture, architects are evaluated via metrics that measure of how well technology is serving the emphasize sharing and collaboration, such as business needs and help give architects a deeper leveraging reusable capabilities built by others and understanding of the business mission. applying common processes to common problems. And a monthly forum serves as a readout from business functions, which share information Architects have become and answer questions from technologists about invaluable advocates strategy, customer needs, and other key topics.
of the platform-centric Other initiatives aimed at increasing architects’ architecture evolution and exposure to business and customer needs are percolating. For example, the technology and user technology organization experience teams are working on ways to integrate restructuring. architects into customer meetings to discuss functions and features. Perlewitz is partnering with customer-facing business functions to position Relevant business metrics include an application’s architects as the connective tissue between these contribution to positive net promoter scores, functions and development teams. customer recommendations, and customer retention and acquisition rates. Operational Architects have become invaluable advocates of proficiency might depend on: the inclusion the platform-centric architecture evolution and of built-in security, operational support, and technology organization restructuring. “They system management; the ability to self-diagnose believe in our vision of making architecture more and provide heuristic automation and analysis; accessible to the masses and help promote it testability; and the number of service disruptions. throughout the company,” Perlewitz says. “Their vocal support and engagement have made a Technology leaders developed monthly forums to significant impact in driving acceptance to change.” encourage information-sharing and collaboration
Engineering an agile enterprise: National Australia Bank expands the role of the technology architect
ATIONAL AUSTRALIA BANK (NAB) is talent to support the digital transformation. Sergei in the midst of a multiyear, multibillion Komarov,9 who has deep experience in enterprise N journey to transform itself into a financial architectural transformation, was hired as one of institution that can respond more quickly and NAB’s technology leaders. efficiently to customer needs. To that end, the bank is replacing its legacy architecture with a In early 2019, NAB restructured its enterprise flexible technology ecosystem. Just as important, architecture function to support more agile ways the organization is reorganizing and training of working. Komarov sees technology architecture
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as a distillation of engineering experience at Next, specialized technology architects provide its core. Good technology architects should be in-depth knowledge of technologies that affect hands-on—building and experimenting with multiple services, such as distributed systems, different technologies and architecture models. data technologies, and microservices. Technology They should take a holistic view and be accountable architects are concerned with specific technology for making sure that the architectures they oversee patterns, practices, and tools applicable across are cohesive and that the parts fit together within many services; they set the technology standards the agile ecosystem. that influence the work of the other two types of architects. Agile organizations are And finally, initiative architects are responsible for built on collaboration— the design of a project or business-facing initiative. They work with business units to help them define a significant change for and shape their technology needs to fit within architects accustomed to the goals of the overall agile enterprise, utilizing a more separate remit. capabilities delivered through enterprise services. Agile organizations are built on collaboration—a To support this philosophy, NAB’s reorganization significant change for architects accustomed to introduced a stewardship model organized a more separate remit. NAB is using metrics to by services that represent durable assets, encourage teamwork and engagement, supported or capabilities, of the bank. Three types of by social and training opportunities. Each architect stewardship roles were created: service architects, has a billability target to help them balance specialized technology architects, and business- their time between project deliverable–oriented facing initiative architects. These complementary work and more proactive strategic planning and roles are vital to the overall architectural function, thinking. This also helps foster a more effective increasing agility across the bank. For many of division of labor that yields a combination of NAB’s existing architects, the transition was a business acumen, expertise in emerging dramatic shift from a relatively isolated role to one technologies, and in-depth understanding of that’s ongoing, collaborative, and future-focused. NAB’s evolving technology estate to achieve common goals. First, each service architect is responsible for overseeing the modernization of a specific business “The industry has sometimes been confused domain service; they are expected to develop a about the role of the architect in the context deep understanding of their assigned service, its of agile, thinking that an agile organization current and target states, and its proper role in doesn’t require any forethought, planning, or the overall IT ecosystem. And their mandate coordination,” Komarov says. “That’s magical involves addressing key questions: Is the service thinking. Enterprises are beginning to realize that resilient and secure? Which applications or agility requires a cohesive, flexible IT ecosystem. systems are destined for obsolescence? Which are And it’s the architect’s job to be an expert in the up-and-coming? Where are redundancies? How construction of such ecosystems.” can the service be simplified and improved over time? Is the service loosely coupled with other enterprise services?
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MY TAKE
ITH TECHNOLOGY SERVING as the backbone for differentiated digital experiences, innovative products and services, and optimized business operations, enterprise architecture carries Wincreasingly critical workloads. When it’s agile and scalable, enterprise architecture can drive value and help businesses realize their strategic vision. When it’s not, it can hamstring digital transformation, expand technical debt, and increase system and software entropy—ultimately leading to organizational inertia.
There’s never been a greater need for the steady hand of effective technical leaders who can build and manage flexible, architecturally sound systems aligned with business needs. When our customers meet with us, I expect them to ask questions about our road map or products, but most of them want CHARLIE BELL to understand how our architects lead the design and building of enterprise SENIOR VICE PRESIDENT, AMAZON WEB SERVICES systems in support of our business strategy.
However, we don’t have the traditional architect role at AWS. The responsibility for technical architecture design lies in the hands of our principal engineers, while our solutions architects help customers design solutions using AWS services. These roles are not functionalized, as is often the case with architects—we discovered that the best mechanism for enforcing common design and centralized thinking is organizing around products. In the early days, we needed a middle-tier application server, but we couldn’t find a cost-effective commercial product that was built for web-based workloads. Several teams were working on duplicative efforts to solve this problem; we took the best one, formed a team around it, and turned it into a product that others could consume.
Today we still use this same model to solve architectural problems. We don’t need to centralize principal engineers. Instead, principal engineers are assigned to product teams—such as Amazon Alexa, Amazon EC2, Amazon Simple Storage Service (Amazon S3), or Amazon DynamoDB. We’ve found that being focused on a specific set of customer needs for longer periods of time allows engineers to be more effective than moving between multiple short-term projects.
Our product development approach emphasizes starting with the customer and working backwards to the product. Before any idea is funded, the product team presents to AWS leadership a one-page internal press release that describes not only the finished product but the customer problem it solves, the specific customer impacted by the problem, and its advantages over existing solutions. The team also develops and presents a five-page Frequently Asked Questions (FAQ) that includes so-called rude questions, such as,With what aspect of the product will customers be most disappointed?
The review process forces product teams—given a single hour to make their case to senior AWS leaders—to gain a deep understanding of the market, customer needs, and product benefits. I participate in reviews of almost all “working backwards” documents, as does our CEO. We discuss and debate the product’s merits, and if the review team decides to allocate resources, the team moves to the planning phase. Often, the review process reveals product weaknesses, and teams go back to the drawing board, make changes, and prepare the press release and FAQ for a second review. Being a part of this process helps orient principal
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engineers and product managers around a common goal and allows them to experience the pressures of delivery and customer needs.
As strategic members of our product teams, principal engineers help find solutions to Amazon’s most demanding problems. The chief arbiters of design are charged with delivering artifacts—from designs to algorithms to implementations. They establish technical standards, drive the overall technical architecture and engineering practices, and work on all aspects of software development.
Our principal engineers are visionary, but they’re also pragmatic. To earn the respect needed to be effective technical leaders, they need to be close to the project details. They don’t waste time developing abstract business requirement documents or hand off development guidelines and technology frameworks to project teams—they roll up their sleeves and pitch in. Principal engineers own all aspects of the services they build, from development efforts to operational responsibilities. They spend time with customers and understand and apply themselves to customer problems, but they’re also in tune with their product’s day-to-day operations, helping shape activities such as operational readiness reviews and change management. If something goes wrong with a service in the middle of the night, the principal engineer gets the call.
A self-organized community of principal engineers meets weekly to develop standards, share information, and build relationships. The group holds talks featuring topics such as the design of a specific service or the availability of new ideas or tools. Typically, hundreds of engineers are in the room, with additional thousands watching the video stream. Group members created a set of fundamental values that outline the overarching philosophy of the role and function; these tenets help set performance standards and serve as decision-making guidelines. The community also organizes design and operational reviews that give members opportunities to provide feedback on new services and solutions in development. Several times a year, members hold offsite meetings to build a sense of community and maintain alignment of the different product teams.
Principal engineers have worked in this way since I started working at Amazon more than two decades ago. Because it works so well for us, it’s almost unthinkable that we’d change. As their teams’ guiding technical light, principal engineers set the standard for engineering excellence, provide unprecedented understanding of customer problems, and equip our enterprise architecture to maximize our innovation speed.
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EXECUTIVE PERSPECTIVES is inance trate
is inance trate is inance trate
STRATEGY FINANCE RISK
Technical debt and legacy As demands for computing and Risk lies in changes being made technology constraints can data services grow, CFOs, CIOs, to existing technology stacks and undermine even the best and architects can collaborate to systems. The more dynamic innovation strategy. If your future-proof technology and those changes are, the more organization is so hamstrung by reduce organizational technical important it will be to consider system complexity that it is debt. They should consider four potential risk impacts from the unable to take advantage of new key questions about their earliest planning stages of any tools that are disrupting your existing computing architecture. project. As you begin redeploying markets, your company is likely First, can the existing computing architects to IT’s front lines, already losing its competitive architecture meet the company’s consider embedding them in advantage. CEOs typically do not growth needs, either organically DevSecOps teams to make sure engage directly with architects, or through M&A? Second, is it that architecture concerns are but they can support architects flexible enough to support factored into any projects. in their expanded roles by strategy changes, for example, Likewise, in architecture trans- creating an enterprisewide divesting a business without formation initiatives, architects culture of risk-taking, innovation, leaving stranded costs? Third, can take greater responsibility for and cross-pollination. This means what are the primary risks to the understanding and addressing encouraging everyone to step architecture—for example, risk issues. Unfortunately, in outside of their skill silos and obsolescence, scaling, and some initiatives, planners treat broaden their perspectives by technical debt? Finally, how will risk as a box to check. Without a talking to others across the architecture shape future capital baseline understanding of a organization. Because archi- expenditure and operating project’s risk profile, it becomes tecture is now more strategically expense models? For example, more difficult to determine the important than ever, it follows with the growth of cloud services, most effective way of managing that architects should engage moving key architecture risk in the future. Does the regularly with strategy components to the public cloud project require just only an initial stakeholders of all stripes. may drive operating costs and assessment, or is it sufficiently Diverse perspectives often lead capital expenditures to differ dynamic to justify ongoing to more effective decision- significantly from those in assessments? And what impact making—a rule of leadership that models. Working together, could flexible, component-based CEOs have long embraced. This finance and IT can model out architectures have on overall risk same rule can benefit architects. likely future tech costs and then profiles? The stakes are too high They are, after all, the individuals allocate capital to flexible to answer these questions who understand existing systems architectures that meet the retroactively. Modernization and and constraints and are best changing needs of the business. risk planning should be part of positioned to design the the same process. strategies that will support emerging technologies and strategic priorities during the next decade.
106 Architecture awakens
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BOTTOM LINE HOW OPEN SOURCE IT leaders at incumbents are realizing that the science of SOFTWARE IS TURBO- architecture—and the technologists who practice it—are more CHARGING DIGITAL strategically important than ever. The architecture awakens TRANSFORMATION trend offers CIOs an opportunity to move architects from their Explore the ways OSS is traditional ivory towers to the IT trenches where their talents sparking collaboration can have greater impact. Empowered architects can then work and productivity. at the vanguard of digital transformation efforts, turning rigid architectures into flexible platforms for future business success.
107 Tech Trends 2020
Authors
SAUL CAGANOFF is a principal with Deloitte Consulting Australia and serves as the chief technology officer for Platform Engineering. He has more than 25 years’ experience as a software engineer and enterprise architect working across business sectors, including financial services, utilities, government, and education. Caganoff specializes in systems integration, digital transformation, and architecture modernization—helping companies to be young again.
KEN CORLESS is a principal and the chief technology officer in Deloitte Consulting LLP’s Cloud practice. With more than 25 years of experience, he is responsible for evangelizing the use of cloud at enterprise scale, prioritizing Deloitte investment in cloud assets, and driving technology partnerships in the ecosystem. Corless’s experience brings together digital, cloud, and emerging technologies to help clients create breakaway products, services, and processes.
STEFAN KIRCHER is a managing director and the chief technology officer in Deloitte Consulting LLP’s Innovation & Platforms practice. With more than 20 years of experience in software, he focuses on delivering strategic technology concepts, road maps, and effective implementations. Kircher also leads research for the Innovation & Platforms practice on key topics such as blockchain, artificial intelligence and machine learning, quantum computing, and IoT, and advises on open source as part of Deloitte’s asset strategy.
SENIOR CONTRIBUTORS
David Sisk Debi Kar Managing director Specialist leader Deloitte Consulting LLP Deloitte Consulting LLP
Dan Spar Thiago Sartorio Managing director Senior manager Deloitte Consulting LLP Deloitte MCS Limited
Vishveshwara Vasa Lori Olson Managing director Specialist leader Deloitte Consulting LLP Deloitte Consulting LLP
Peter Long Laks Venkateswaran Director Specialist master Deloitte MCS Limited Deloitte Consulting LLP
João Faria Maciej Żwirski Senior manager Manager Deloitte & Associados, SROC S.A. Deloitte Advisory sp. z o.o. sp. k.
108 Architecture awakens
Endnotes
1. Bill Briggs et al., 2018 CIO Survey: Manifesting legacy, Deloitte Insights, August 8, 2018.
2. Peter B. Nichol, “Why enterprise architecture maximizes organizational value,” CIO.com, February 6, 2018.
3. Deloitte Dbriefs Webcast, “The future of architecture: Designing a foundation for growth,” Deloitte, October 3, 2019.
4. Ken Corless et al., Reengineering technology: Building new IT delivery models from the top down and bottom up, Deloitte Insights, December 5, 2017.
5. Ken Corless, Kieran Norton, and Mike Kavis, NoOps in a serverless world, Deloitte Insights, January 16, 2019.
6. Mark Lapedus, “Engineering talent shortage now top risk factor,” Semiconductor Engineering, February 25, 2019.
7. Cynthia Czabala (VP of enterprise services, Intercontinental Hotels Group), phone interview with authors, October 11, 2019.
8. Jason Perlewitz (director of technology, Thomson Reuters), phone interview with authors, October 29,2019.
9. Sergei Komarov (chief architect, National Australia Bank), interview with authors, December 2, 2019.
109 TREND SUMMARY
Look beyond what’s new to what’s next to help guide today’s business and technology decisions. Engineering an agile enterprise: National Australia Bank expands the role of the technology architect
Horizon next: A future look at the trends
Horizon next A future look at the trends
HE BEST WAY to predict the future is to Prospection, not just “ create it.” Peter Drucker’s well-worn adage prediction Tcontains at least two distinct ideas. The first: that initiative and determination trump passivity Prediction is useful, but it is only one of the and idle speculation. The second? The notion modes of thinking we employ when factoring for that prediction is itself a fool’s errand because the the future. A more appropriate umbrella term is future is essentially opaque and unknowable. prospecting. Futurists acknowledge that there are many prospective futures, and that organizations But as we discussed in Tech Trends 2019, if you would be wise to actively maintain a “matrix of can be deliberate about sensing and evaluating maybes”—an inventory of not-ready-for-prime- emerging technologies, you can make the time technology prospects that may (or may never) unknown knowable. The principled consideration drive widespread business impact. of tomorrow can be a profoundly useful tool in guiding today’s business and technology decisions. Using a traditional one-to-two-year budgetary It will no longer matter lens, a company might be inclined to incrementally if the necessary talent adjust last year’s budget by factoring in next year’s forecast. A longer view challenges us to rethink this and technology is built, approach and make entirely new bets. Disciplined futurism can help us avoid overindexing on borrowed, or bought. the past. This process of sensing, scouting, and scanning can There’s an inherent tension in planning for the help expand apertures for what is looming beyond horizon beyond. While the full potential of the the horizon, and for when and by whom. This last technologies explored in this chapter may not point is important. Companies can challenge “not become clear for several more years, there are invented here” organizational bias by embracing relevant capabilities and applications emerging ecosystems of new players that can help make now that can provide a foundation for what’s strategies real. It will no longer matter if the coming next. If you wait several years before necessary talent and technology is built, borrowed, thinking seriously about them, you may have to or bought. Armed with numerous à la carte wait three to five years beyond that for your first prospects as an input, leaders can use research- nonaccidental gain. Because these forces are based methods to determine which prospects developing at an atypical, nonlinear pace, the are viable. longer you wait to begin exploring them, the further your organization may fall behind.
111 TREND SUMMARY
Look beyond what’s new to what’s next to help guide today’s business and technology decisions.
Tech Trends 2020
pulse check on grant awards can help you learn more about individual initiatives and macro movements.
• Patent applications begin to spin off as concepts mature from ideas to inventions. Patent filings and awards, which are matters of public record, provide not only detailed visibility into what technologies are coming of age but, critically, how they are being designed and architected.
• Open-source activity is another helpful R&D Many of today’s emerging lens. Twenty years ago, high-value software was technologies are created largely a heavily guarded trade secret. Many of today’s emerging technologies are created out in the open, by out in the open, by collaborative amateurs collaborative amateurs and professionals.1 By studying open-source software trends, you can begin to detect those and professionals. By technology prospects that have the most studying open-source gravitas and momentum. software trends, you can • Startup activity and venture capital inflows can provide insights into the early inklings begin to detect those of a concept’s financial viability. By further technology prospects that monitoring startups’ commercial traction, you can begin to understand directional product- have the most gravitas market-fit. In short, you can bear witness to and momentum. a concept’s graduation from an experimental technology to a sustainable business model. RESEARCH AND DEVELOPMENT Signals that can alert you to what’s happening in AWARENESS AND ACTIVATION R&D come from several sources. Tracking activity The first collection of signals track money and over time can help triangulate investment, solution invention. The signals below are equally important, maturity, and patterns of advancement. A deeper representing traction and growing impact across understanding of each can give you the confidence enterprises as they mature and are deployed in the you’ll need to tackle the hardest piece of the world. equation: timing any investment. Sources of intel include: • Acquisitions activity tells the story of an emerging concept’s breakthrough from • Grant funding provides a window into disruptive outsider to constructive insider. prospects’ earliest momentum. Because While any individual M&A deal may distract transformational technologies are often born with gaudy financials or a curious strategic in academic and lab environments, a periodic rationale, the landscape view is typically telling.
112 Horizon next: A future look at the trends
• Media and PR are also a “tell.” As accelerating technologies turn the corner from hope to hype, As organizations transition media research and sentiment analysis quantify TREND SUMMARY from PR and media the buzz, shining a light on new entrants’ marketability and virality. Some skepticism campaigns to budgeted Lookhere is warranted, beyond as hype what’s cycles can distract new toinvestment what’s next in tostrategy, help guideand disguise today’s barriers to investment. business and technologyprocesses, and decisions. people, • Established vendor road maps mark an the pivot from talk to organization’s enthusiasm for, and commitment to, a new technology. As organizations walk begins in earnest. transition from PR and media campaigns to budgeted investment in strategy, processes, and people, the pivot from talk to walk begins in earnest.
• Commercial momentum formalizes an emerging technology’s coming of age. Whereas the aforementioned lenses are inherently supply-side in nature, commercial transactions, at scale, denote quantifiable market demand. These can be told via press releases, vendor case studies, keynotes, and even sometimes earnings reports.
• Job postings can be the final proof point for accelerating maturity. From salaried job openings to increases in demand on crowdsourcing marketplaces, expressed need for talent aligned to a given topic or technology is a great proxy for growing mindshare and investment.
HORIZON NEXT To make sense of the vast number of technology prospects, there’s a clear need for a unified view organized by both the macro technology forces and by their anticipated time horizon. The construct in figure 1 is neither exhaustive nor precise. But it does convey our confidence that in a world of uncertain futures, it is possible to bring order to and focus attention on a meaningful collection of known technologies that can help you shape your ambitions, focus your investments, and chart a path to tomorrow.
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Horizon next MACRO FORCES t e er e ce us ess of tech o o y t re ty a e en e he va nu ber echn y r ec we yt cs s o t ve have grouped them by influencing macro force and anticipated ou ore o er t o oc ch e h r n. he re u n v ew ne her e hau ve n r rec e
but it does convey our belief that today’s realities can offer a o t ve b e t c e ce e tech o o es e rr w b e . s ht co ut
ev ec s v ce EM u tu s ER o e rth GI os e eto s NG s te tes o o co e : tfor s ece tr e 2 oc ch uto o ous 5 o t ve Y e ch es ss b se or t o EA ss st ce t stor e R rt u e te S o vers t o vo ce obot c rocess uto t o co tr cts re ty c ou S terf ces R tr se sory A E y c t o o y ter et of Th s co ut v ce u tu Y s u tors u tu 2 tfor s o t ve T ct e or th s se s : ter et T Software-defined e t e uto o cs f ctory yt cs E re ct o K et or et or se e t t o s c R ob ect A o uter o e M e sors ybr u tu v s o c ss c or th s T e e t te e t ev ces croe ectro ech c et or s N E roof of st e syste s R rtu u tu R eur co se sus r cry to r hy r t ch e e t e t re ty U et or s ys s robot cs e r b e C e r br co tro e ou erv ce eshes terf ces erver ess oo o ere co ut robot cs ter r se e t c co ut uto te co e ter et co ut te r t o ref ctor b e esh et or s u e te t ve u tu o te t croserv ces or th s cro erso t o e force e t re ty u tu
e r o e c e e t e co u c t o t
co ut roof of or et or t co se sus str bute e er t ve r h fu ct o hys c e t t es eurosc e ce eb v ce eur ust co fro t t o v rtu t o yt cs robot cs b o etr cs rtu et or s Affective e o t er t o co ut be s re ty e t e t ve T uf ctur rt H ee e terous r rt ust E u tory yt cs tur u e e r robot cs F tur u e e er t o U rocess T ter r se T u e te oc ch co t o euro or h c U o e source t s u t o R or c es co ut ce E re os tor es e es or th tech o o y : e co s e ch es
5 otech u tu v ce Y e T t e E v su t o A r v te ub c r t fu t stor e Artificial general T R hybr c ou v ce te e ce S c c u s t o s ct v ty ro es reco t o te t c t o s te br co tro Artificial u tu terf ces se s s oc r et st b she ve or ro s co ut ou y bo c uto t o secur ty e source ct v ty v ro e t e er y syste s o t ve o erc o e tu uto t o To o o c u tu y c t e t e e ter r se t rtu ct v ty otech o o y co ut co te t e e t tech o o y ob ost s b o for t cs u tu ch e e r
114 Horizon next: A future look at the trends
Horizon next MACRO FORCES t e er e ce us ess of tech o o y t re ty a e en e he va nu ber echn y r ec we yt cs s o t ve have grouped them by influencing macro force and anticipated ou ore o er t o oc ch e h r n. he re u n v ew ne her e hau ve n r rec e but it does convey our belief that today’s realities can offer a o t ve b e t c e ce e tech o o es e rr w b e . s ht co ut
ev ec s v ce EM u tu s ER o e rth GI os e eto s NG s te tes o o co e : tfor s ece tr e 2 oc ch uto o ous 5 o t ve Y e ch es ss b se or t o EA ss st ce t stor e R rt u e te S o vers t o vo ce obot c rocess uto t o co tr cts re ty c ou S terf ces R tr se sory A E y c t o o y ter et of Th s co ut v ce u tu Y s u tors u tu 2 tfor s o t ve T ct e or th s se s : ter et T Software-defined e t e uto o cs f ctory yt cs E re ct o K et or et or se e t t o s c R ob ect A o uter o e M e sors ybr u tu v s o c ss c or th s T e e t te e t ev ces croe ectro ech c et or s N E roof of st e syste s R rtu u tu R eur co se sus r cry to r hy r t ch e e t e t re ty U et or s ys s robot cs e r b e C e r br co tro e ou erv ce eshes terf ces erver ess oo o ere co ut robot cs ter r se e t c co ut uto te co e ter et co ut te r t o ref ctor b e esh et or s u e te t ve u tu o te t croserv ces or th s cro erso t o e force e t re ty u tu
e r o e c e e t e co u c t o t
co ut roof of or et or t co se sus str bute e er t ve r h fu ct o hys c e t t es eurosc e ce eb v ce eur ust co fro t t o v rtu t o yt cs robot cs b o etr cs rtu et or s Affective e o t er t o co ut be s re ty e t e t ve T uf ctur rt H ee e terous r rt ust E u tory yt cs tur u e e r robot cs F tur u e e er t o U rocess T ter r se T u e te oc ch co t o euro or h c U o e source t s u t o R or c es co ut ce E re os tor es e es or th tech o o y : e co s e ch es
5 otech u tu v ce Y e T t e E v su t o A r v te ub c r t fu t stor e Artificial general T R hybr c ou v ce te e ce S c c u s t o s ct v ty ro es reco t o te t c t o s te br co tro Artificial u tu terf ces se s s oc r et st b she ve or ro s co ut ou y bo c uto t o secur ty e source ct v ty v ro e t e er y syste s o t ve o erc o e tu uto t o To o o c u tu y c t e t e e ter r se t rtu ct v ty otech o o y co ut co te t e e t tech o o y ob ost s b o for t cs u tu ch e e r
115 Tech Trends 2020
Patterns between signals MACRO FORCES REVISITED The macro technology forces have evolved over Sensing, scouting, and scanning across horizons Deloitte’s 11 years of technology trends research. are techniques meant to help make the future With our eyes on the next horizon, we’ll do a quick more navigable. At the very least, they can define deconstruction of ambient experience, exponential the playing field of potentialities. Unfortunately, intelligence, and quantum to look at today’s the reality of the volume of concurrent advances building blocks as we wait for technology advances and the accelerating pace of change can have the required to realize the full vision. opposite effect: They can seem overwhelming while stoking cynicism, undermining the confidence But first, let’s apply this thinking to a more of companies pursuing emerging tech. With so established, familiar concept such as cloud. In much going on, how can you possibly decide what our firstTech Trends report in 2010, much of matters, much less what to do about it? the dialogue with our clients focused on cloud’s definition, its potential impact, and its projected Luckily, many of the individual technologies noted expanded role in enterprises. Seasoned CIOs earlier are themselves building blocks of larger were dismissive of the concept, arguing that it categories of change that have the benefit of being seemed like some old mainframe concepts being less volatile, more easily understood, and having repackaged. The response 11 years ago is the same clearer applications to one’s business or mission. as today’s response: Those naysayers were not The macro forces construct—enablers, disruptors, technically wrong, but neither was their thinking foundation, and horizon next—introduced in the complete. Cloud is absolutely an evolution of macro technology forces chapter is an attempt essential mainframe concepts, from logical to distill decades of technological change into a partitioning to distributed storage to virtualization. set of manageable clusters. Besides being more It also represents advances in standardized data digestible, they remain relevant for longer periods transmission, network protocols, grid computing, of time, allowing momentum to build externally— multitenant resource pooling, identity and access consolidation of ecosystems, maturation of product management, dynamic provisioning, measured and solution offerings, increased and increasingly services (the ability to meter, bill for, monitor, insightful coverage by analysts and the media—and and control underlying resources), and more, at internally, with concrete examples of positive scales historically unimaginable, at price points impact leading to growing investment appetite and that would have been unthinkable, and with an positive word of mouth across the organization. unprecedented road map of expanding capabilities up, down, and across the technology stack. Choose This is no ontological shell game. For most your metaphor: “Cloud” is the meal made from business and IT executives, the piece-parts that these individual ingredients, the symphony for can lead to significant technology breakthroughs these instruments, the molecule for the atoms. aren’t just ungainly—they’re incomprehensible. Much like traditional R&D and scientific labs, The most important fact is this: The focus has the combinations of underlying technology lend moved from conversations about what’s under the themselves to applications and products for the hood toward investments in the composite driving broader market. Looking forward is necessary, and real business impact. The same is happening for some of the individual advances will no doubt lead the other macro forces at the horizon now and to bold new thinking. That said, these broader next and will, eventually, happen for those at the categories will likely represent the biggest bang for horizon beyond. the emerging technology buck.
116 Horizon next: A future look at the trends
Each of the macro forces and the broader inventory maturing of each individual technology with the of emerging technologies will mean different need to project potential business use cases as things to different industries and geographies. But they come together is where the action is. It is also one thing is universal: None of these individual nearly impossible to do without an intentional, technologies comprises a strategy. Balancing the structured approach to sensing and incubation.
PATH TO TOMORROW Ambient experience, exponential intelligence, and quantum are the nascent macro forces we currently see on the distant horizon. Like cloud technologies before them, they will evolve over time and perhaps cross-pollinate with other forces to create something wholly new. For each, here’s a quick exploration of where they’re heading, and a snapshot of some of the technology breadcrumbs helping build toward that potential.
Ambient experience. Represents a world where the physical and the digital are intertwined with such elegance and simplicity that we shift to natural, intuitive, and increasingly subconscious (maybe even unconscious!) ways of engaging with complex technologies.
• Machine-to-machine interfaces • Edge computing • Internet of Things • 3D object modeling • “Smart” devices • Spatial computing • Computer vision • Dynamic digital content management • Intelligent conversational interfaces • Digital identities • Beacons • Brain-computer interfaces • 5G • Extrasensory computing
Exponential intelligence. General-purpose superintelligence able to build algorithms, confident predictions, and automated responses across complex, dynamic, and constantly evolving domains.
• Deep learning • Advanced visualization • Neural networks • Data simulation engines • Symbolic AI • Cognitive assistance • Reinforcement learning • Autonomics • Generative confrontational networks • Algorithm exchanges • Semantic computing • Dynamic taxonomy platforms • Advanced data management • Quantum algorithms
Quantum. Evolution of computing to harness the power of quantum dynamics to dramatically unlock new workloads and insights. • Advanced quantum SDKs • Quantum sensing • Hybrid quantum/classical algorithms • Advanced quantum simulators • Native quantum algorithms • Quantum computing • Quantum machine learning • Quantum annealing • Quantum cryptography • Topological quantum computing • Quantum communication
117 Tech Trends 2020
MY TAKE
NTERPRISE BUSINESS AND technology leaders are not that different from venture capitalists. In an era in which innovation is a business imperative, we share many of the same challenges. We’re all trying to Epredict which technology trends have the potential to drive the most value.
There’s no secret formula for finding the next big breakthrough. Andreessen Horowitz partners sit through thousands of entrepreneur pitches every year and serve as board members for hundreds of startups. Those conversations are a window into the future—not necessarily because they allow us to identify the next new tech trend but because they give us insight into how current industry trends are evolving to influence enterprises in the future. Here are three current trends we expect to leave their mark on enterprises in the coming three to five years.
Ascendancy of data. In the past, a software system’s code dictated its performance, accuracy, security, and compliance. Increasingly, these characteristics are dictated by the data being fed into systems: The code (via MARTIN CASADO machine learning) obediently learns from the data and spits out business GENERAL PARTNER, insights and predictions. Technologists know how to handle code, but dealing ANDREESSEN HOROWITZ with data is intrinsically more challenging. Data is heavy-tailed and complex, and like a fractal, it’s self-similar—closer to computational physics than to engineering. The toolsets for working with data are completely different than those for working with code. As a result, we expect the entire enterprise technology stack to be refreshed to accommodate data’s primacy over code.
The ascendancy of data also presents a volume challenge. The availability of inexpensive data warehouses allowed enterprises to amass vast amounts of data. But the economies of scale that are often seen with software and hardware products are missing—in fact, the unit economics of increasing data are almost always worse. Many entrepreneurs and business leaders seem to expect that turning an algorithm loose on a large volume of data will magically conjure valuable patterns and insights. But more data also means more noise, more redundancy, and more effort to keep it fresh. Identifying the value of their data can help enterprises develop a sustainable plan for using it to gain competitive advantage and build a defensible long-term business.
Cost and margin structure of cognitive technologies. Businesses are using machine vision, machine learning, and natural language processing to tackle problems at scale that we could never dream of before. Consider, for example, large operational centers that deal with huge amounts of data or industrial applications such as picking and packing agricultural products.
Software-driven business process automation historically helped companies achieve higher profit margins, but we don’t fully understand the margin structure for some cognitive technologies, particularly those that use a lot of data storage and computational power—for example, image processing, text recognition, and natural language processing. It costs roughly the same to use human workers to make complex judgments using unstructured and paper-based information as it does to use cognitive technologies to do the same.
118 Horizon next: A future look at the trends
We can begin to see a cost differential when we use cognitive technologies to deal with more structured and electronic information.
The progress we’ve made has led some business and technology leaders to adopt an “end of theory” philosophy. In this line of thinking, even when a company doesn’t know a business problem exists, applying artificial intelligence, machine learning, and/or automation will reveal both the problem and its solution. But until it’s clear that leaning heavily on these technologies can actually lower costs, a good way to deliver value is to first understand the costs and margins of cognitive applications and, then, determine the appropriate combination of human workers and cognitive technologies that produces the best cost/performance ratio.
Bottom-up technology adoption. The decentralization of technology buying from procurement specialists to the business end user will continue to have huge implications for product design and adoption. For many years, CIOs and other technology leaders have been managing the security, support, and budget implications of this issue—variously termed consumerization of IT, “consumerprise,” B2C2B, or shadow IT—aiming to strike a comfortable balance between controlling technology and employee productivity and morale. Consider the user-driven enterprise adoption of consumer-branded smart watches, hardware security keys, SaaS productivity and collaboration solutions, and even open-source core infrastructure.
Today’s most promising startups are betting their businesses that bottom-up enterprise technology adoption will soon encompass nearly every enterprise technology product and solution. When everybody’s a technology buyer, products will continue to become easier to use and the cost per product or license will decrease. The shift to bottom-up technology adoption mandates a massive shift in the way organizations adopt and purchase technology. Businesses will need—soon—a comprehensive plan for addressing this purchasing shift.
The startups and entrepreneurs we talk to are our eyes and ears in the market. Their product and solution pitches help us understand consumer and business problems and how today’s technology and business trends are evolving to address them. By understanding how bottom-up technology adoption, the ascendancy of data, and the cost and margin structure of cognitive technologies are influencing their business models now and will continue to do so in the future, enterprises can take a step toward future-proofing their businesses to support agility and innovation.
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Backcasting: From Establishing a culture of curiosity and learning in probable to profitable your organization helps but likely won’t be enough, considering the pace of change and the complexity By stepping back from the possible, through of emerging fields. To survey the landscape and the probable, we can get to the sober work of unearth the technologies and companies that may backcasting: planning today’s technology decisions be defining the future, leaders should consider and investments in concert with tomorrow’s several concurrent approaches. likely ends. Enterprising leaders see these emerging technology prospects not as threatening • Sense-making. Many organizations are disruptions or distracting shiny objects but, rather, establishing internal sensing functions to as the building blocks of their organization’s future. explicitly monitor advances and imagine impacts on the business. Begin building There’s growing interest among enterprises in hypotheses based on sensing and research. looking beyond what’s new to what’s next, and Identify a macro technology force and little wonder—an understanding of what’s coming hypothesize its impact on your products, your can inform early budget planning and enable the production methods, and your competitive relationships that make it possible to reap the environment in early and mid-stage emergence. associated rewards when the time comes. Then perform research around that hypothesis, using thresholds or trigger levels to increase or But at present, many enterprises lack the decrease activity and investment over time. structures, capabilities, and processes required to harness these macro forces and innovate effectively • Trusted collaborators. Companies can in the face of exponential change. It might be leverage their existing set of vendors and tempting to fund a stable of smart scientists and alliances to get the pulse of their direct and engineers and let them pursue ideas and technical closest collaborators. Consider holding joint proofs of concept in a vacuum. While this approach innovation workshops to understand the can bring technologies to life, this group often variables directly affecting an organization. struggles to create solutions that truly add lasting It can help your organization tap into new value to the company. thinking, and your established partners’ road maps can, in turn, spur new ideas. This can Leading organizations have a disciplined, also start the process of collaboration within measured innovation program that aligns traditional circles while identifying and innovation with business strategy and a long-term launching leading change agents. technology landscape. They take a programmatic approach to sensing, scanning, vetting, • A nontraditional path. Some leading experimenting, and incubating these future macro companies are also forging new relationships. technology forces—until the technology, the Develop a broader ecosystem with market, and the business applications are ready on nontraditional stakeholders—such as startups, an enterprisewide scale. scientists, incubators, venture investors, academia, and research bodies—which can lead CLARIFY THE LANDSCAPE OF NEW to a wide range of fresh perspectives. In turn, TECHNOLOGIES AND PLAYERS your organization can serve as the lifeblood for With sensing, organizations can stay on top of startups, whose existence may rest on finding new developments in technology, and identify and the right partners and customers quickly to understand how they are driving advancement. create an interconnected market.
120 Horizon next: A future look at the trends
HARNESS THE POSSIBLE combination of technology, innovation, and At some point, your research reaches a threshold business strategy. at which you can begin exploring the “state of the possible.” In early stages, forgo exhaustive business INCUBATE NEW PRODUCTS, SOLUTIONS, cases and instead focus on framing scenarios SERVICES, AND BUSINESS MODELS around impact, feasibility, and risk. When the experiment’s value proposition meets the expectations set forth in your business case, • Show versus tell. Look at how others in your then you can consider more substantial investment industry are approaching or even exploiting by moving into incubation, where you foster the these forces. At this point, show is better than growth of technology-driven products, solutions, tell. Try to collect 10 or more examples of what services, and even new business models. others are doing. These can help you and your colleagues better understand the technology • Dedicated team. Some companies have forces and their potential. established innovation centers that are separate from the core business and staffed • State of the practical. Once your with dedicated talent. These formal initiatives organization better understands the future typically have incubation and scaling expertise. macro forces and their potential impact, They may also have the capacity to carry out the convene around the “state of the practical.” level of enhancement, testing, and hardening Specifically, could those same approaches needed before putting your innovation harm or benefit your business? What about into production. this opportunity is desirable from a customer perspective? And importantly, do you have the • Turtle or hare? Be cautious about critical capabilities and technology assets you moving too quickly from incubation to full will need to capitalize on this opportunity? production. Even with a solid business case and encouraging experiments with containable • Exploration into experimentation. circumstances and uses, at this stage your new To move beyond exploration and into innovation is not proven out at scale. You will experimentation, try to prioritize use cases, likely need an incubator that has full scaling develop basic business cases, and then abilities to carry out the level of enhancement, build initial prototypes. If the prototypes testing, and fixes needed before putting your yield results—perhaps with some use case new idea out into the world at full force. pivots—then you may have found a winning
BOTTOM LINE
Some think of technology innovation as nothing more than eureka! moments. While there is an element of that, harnessing advanced technology to create new opportunities is more about programmatic, disciplined effort, carried out over time, than it is about inspiration. Organizations should consider how to establish a program that can effectively identify, evaluate, and incubate these future macro technology forces to transform their enterprises, agencies, and organizations—before they themselves are disrupted. In a world of seemingly infinite unknowns, it is possible to focus attention on a meaningful collection of known technologies that, taken together, can help you chart a path to the next horizon.
121 Tech Trends 2020
Authors
MIKE BECHTEL is a managing director with Deloitte Consulting LLP. An inventor, investor, and futurist, he leads the research and development of novel and experimental technologies. Bechtel also helps Deloitte and its clients best engage the startup community, catalyzing profitable relationships between established enterprises and emerging entrepreneurs. A former VC and CTO, he also serves as a professor of corporate innovation at the University of Notre Dame.
BILL BRIGGS is a principal with Deloitte Consulting LLP and is the global chief technology officer. With more than 20 years of experience, he helps clients anticipate the impact that emerging technologies may have on their businesses in the future, and how to get there from the realities of today. He also helps define the vision and incubate the future of Deloitte Consulting LLP’s evolving technology services and offerings. Briggs serves as executive sponsor of Deloitte’s CIO Program, offering CIOs and other IT executives insights on how to navigate the complex challenges they face in business and technology.
SCOTT BUCHHOLZ is a managing director with Deloitte Consulting LLP and serves as the Government and Public Services chief technology officer and the national Emerging Tech Research director. A leader and visionary with more than 25 years’ experience, he advises clients on how to navigate the future using existing and emerging technologies. Buchholz also leads Deloitte’s efforts to incubate nascent technology offerings.
SENIOR CONTRIBUTORS
Sonal Naik Mariahna Moore Managing director Senior manager Deloitte Consulting LLP Deloitte Consulting LLP
122 Horizon next: A future look at the trends
Endnotes
1. Bill Briggs, Stefan Kircher, and Mike Bechtel, Open for business: How open source software is turbocharging digital transformation, Deloitte Insights, September 17, 2019.
123 Tech Trends 2020
Executive editors
Bill Briggs Global chief technology officer Deloitte Consulting LLP [email protected]
Bill Briggs’ 20-plus years with Deloitte have been spent delivering complex transformation programs for clients in a variety of industries, including financial services, health care, consumer products, telecommunications, energy, and the public sector. He is a strategist with deep implementation experience, helping clients anticipate the impact that new and emerging technologies may have on their businesses in the future—and getting there from the realities of today.
In his role as CTO, Briggs is responsible for research, eminence, and incubation of emerging technologies affecting clients’ businesses and shaping the future of Deloitte Consulting LLP’s technology-related services and offerings. He also serves as executive sponsor of Deloitte’s CIO Program, offering CIOs and other IT executives insights and experiences to navigate the complex challenges they face in business and technology.
Scott Buchholz Emerging Technology research director and Government & Public Services chief technology officer Deloitte Consulting LLP [email protected]
With more than 25 years of experience in technology innovation and implementation, Scott Buchholz focuses on helping clients transform the way they deliver their missions and businesses through technology. He supports organizations across industries by providing advice and insights on how to evolve their technology and their organizations to improve performance, effectiveness, and efficiency.
In his role as CTO for Deloitte Consulting LLP’s Government and Public Services practice, Buchholz works with clients to implement innovation across a diverse set of areas, including legacy modernization, eGovernment and eCommerce solutions, and solution architecture.
As the emerging technologies research director and the sponsor of Tech Trends, he helps identify, research, and champion the technology trends that are expected to have significant impact on the market and clients’ businesses in the future.
124 Authors and acknowledgments
Executive perspectives authors
STRATEGY
Benjamin Finzi US Chief Executive Program leader | Deloitte Consulting LLP
Benjamin Finzi is a managing director with Deloitte Consulting LLP and coleads Deloitte’s Chief Executive Program. As a founder of New York’s Deloitte Greenhouse® Experience, he has designed and facilitated hundreds of immersive “lab” experiences for CEOs and their leadership teams, combining principles of business strategy with behavioral science and design thinking to address clients’ challenges. Finzi has been focused for more than 20 years on researching and understanding how companies succeed in disruptive markets.
FINANCE
Ajit Kambil CFO Program global research director | Deloitte LLP
Ajit Kambil is the global research director of Deloitte LLP’s Chief Financial Officer Program. He oversees research in areas such as leadership, capital markets, and risk. Kambil created CFO Insights, a biweekly publication serving more than 38,000 subscribers, and developed Deloitte’s Executive Transition Lab, which helps CXOs make an efficient and effective transition into their new role. He is widely published in leading business and technology journals.
Moe Qualander Principal | Deloitte & Touche LLP
Moe Qualander is a principal with Deloitte & Touche LLP’s Risk & Financial Advisory practice. He has more than 20 years of experience, specializing in assessing internal controls in financial business operations and IT. Qualander leads Deloitte’s Chief Financial Officer Program’s Center of Excellence, focusing on creating and enhancing relationships with clients’ CFOs. As dean of Deloitte’s Next Generation CFO Academy, he assists future finance executives with enhancing their leadership, influence, and competency skills.
RISK
Deborah Golden US Cyber Risk Services leader | Deloitte & Touche LLP
Deborah Golden is a principal with Deloitte & Touche LLP and Deloitte’s US Cyber Risk Services leader. She brings more than 25 years of information technology experience in industries that include government and public services (GPS), life sciences and health care, and financial services to the role, and previously served as Deloitte’s GPS cyber leader, as well as GPS Advisory market offering leader. Golden also serves on Virginia Tech’s Business Information Technology and Masters in Information Technology advisory boards.
125 Tech Trends 2020
Chapter authors
MACRO TECHNOLOGY FORCES
Bill Briggs Scott Buchholz Sandeep Sharma, PhD Global chief Government & Public Deputy chief technology officer Services chief technology officer technology officer Deloitte Consulting LLP Deloitte Consulting LLP Deloitte Consulting LLP [email protected] [email protected] [email protected]
ETHICAL TECHNOLOGY AND TRUST
Catherine Bannister Deborah Golden Technology Fluency and US Cyber Risk Services leader Ethics global director Deloitte & Touche LLP Deloitte Services LP [email protected] [email protected]
FINANCE AND THE FUTURE OF IT
John Celi Ajit Kambil Khalid Kark Business Agility US leader CFO Program global US CIO Program Deloitte Consulting LLP research director research leader [email protected] Deloitte LLP Deloitte Consulting LLP [email protected] [email protected]
Jon Smart Zsolt Berend Business Agility UK leader Business Agility senior manager Deloitte MCS Limited Deloitte MCS Limited [email protected] [email protected]
126 Authors and acknowledgments
DIGITAL TWINS: BRIDGING THE PHYSICAL AND DIGITAL
Adam Mussomeli Aaron Parrott Brian Umbenhauer Supply Chain & Network Supply Chain & Network Industrial Products and Operations leader Operations managing director Construction leader Deloitte Consulting LLP Deloitte Consulting LLP Deloitte Consulting LLP [email protected] [email protected] [email protected]
Lane Warshaw, PhD Analytics & Cognitive managing director Deloitte Consulting LLP [email protected]
HUMAN EXPERIENCE PLATFORMS
Tamara Cibenko Amelia Dunlop Nelson Kunkel US Digital Experience lead Deloitte Digital chief Deloitte Digital chief design officer Deloitte Consulting LLP experience officer Deloitte Consulting LLP [email protected] Deloitte Consulting LLP [email protected] [email protected]
ARCHITECTURE AWAKENS
Saul Caganoff Ken Corless Stefan Kircher Platform Engineering chief Cloud chief technology officer Innovations & Platforms technology officer Deloitte Consulting LLP chief technology officer Deloitte Consulting Pty Ltd [email protected] Deloitte Consulting LLP [email protected] [email protected]
HORIZON NEXT: A FUTURE LOOK AT THE TRENDS
Mike Bechtel Bill Briggs Scott Buchholz Managing director Global chief technology officer Government & Public Services Deloitte Consulting LLP Deloitte Consulting LLP chief technology officer [email protected] [email protected] Deloitte Consulting LLP [email protected]
127 Tech Trends 2020
Contributors
Mukul Ahuja, Zillah Austin, Randall Ball, Sonali Ballal, Tushar Barman, Neal Batra, Jonathan Bauer, Mike Brinker, Randy Bush, Rachel Charlton, Sandy Cockrell, Allan Cook, Megan Cormier, Amit Desai, Anant Dinamani, Sean Donnelly, Matt Dortch, Deborshi Dutt, Karen Edelman, Michael Fancher, Frank Farrall, Jourdan Fenster, Bryan Funkhouser, Andy Garber, Haritha Ghatam, Cedric Goddevrind, Jim Guszcza, Maleeha Hamidi, Steve Hardy, Blythe Hurley, Lisa Iliff, Siva Kantamneni, Mary-Kate Lamis, Blair Kin, Kathy Klock, Yadhu Krishnan, Michael Licata, Mark Lillie, Veronica Lim, Mark Lipton, Kathy Lu, Adel Mamhikoff, Sean McClowry, JB McGinnis, Meghan McNally, Kellie Nuttall, Melissa Oberholster, Arun Perinkolam, Ajit Prabhu, Aparna Prusty, Mohan Rao, Hannah Rapp, Scott Rosenberger, Mac Segura-Cook, Preeti Shivpuri, Lisa Smith, Gordon Smith, Tim Smith, David Solis, Alok Soni, Patrick Tabor, Sonya Vasilieff, Aman Vij, Jerry Wen, Mark White, Drew Wilkins, Abhilash Yarala, Andreas Zachariou, and Jim Zhu.
Research team
LEADS
Cristin Doyle, Chris Hitchcock, Betsy Lukins, Dhruv Patel, Andrea Reiner, and Katrina Rudisel.
TEAM MEMBERS
Stephen Berg, Erica Cappon, Enoch Chang, Tony Chen, Ankush Dongre, Ben Drescher, Ahmed Elkheshin, Harsha Emani, Jordan Fox, Riya Gandhi, Dave Geyer, Maddie Gleason, April Goya, Adhor Gupta, Alex Jaime Rodriguez, Morgan Jameson, Solomon Kassa, Pedro Khoury-Diaz, Emeric Kossou, Dhir Kothari, Shuchun Liu, James McGrath, Hannan Mohammad, Spandana Narasimha Reddy, Gabby Sanders, Joey Scammerhorn, Kaivalya Shah, Deana Strain, Samuel Tart, Elizabeth Thompson, Samantha Topper, Kiran Vasudevan, Greg Waldrip, and Katrina Zdanowicz.
128 Authors and acknowledgments
Special thanks
Mariahna Moore for gracefully accomplishing the impossible year after year, making it look easy, and ensuring we always follow the rules. Your standards for excellence continue to help Tech Trends live up to its potential. And your ability to stay cool, keep a firm hand on the tiller, and always have a plan for navigating the upcoming challenges is unmatched.
Doug McWhirter for consistently developing deft, incisive prose out of copious streams of consciousness, innumerable interviews, reams of research, and stampedes of SMEs. Your wit, wisdom, and patience help make Tech Trends 2020 the research opus that it is.
Dana Kublin for your talent of conjuring insightful visuals, intuitive infographics, and fascinating figures out of thin air and unclear descriptions. Your ability to talk us out of our crazy ideas and then show us an improved version of what we told you makes all the trends better.
Stefanie Heng for your “gentle persistence” at managing the nonstop, day-to-day activities and always bringing a smile to everything you do. Your grace under pressure and your unflinching commitment to the project has enabled us to “get to done.”
Caroline Brown, Tristen Click, and Linda Holland for your depth of craft, inspired creativity, and immense patience. Whether dealing with infographics, chapters, or interviews, your collective talents, attention to detail, and willingness to go the extra mile made Tech Trends better.
Kaitlin Crenshaw, Natalie Martella, and Camilo Schrader for a fabulous freshman year. Your support as part of the Tech Trends family has been invaluable as you helped keep us on track for interview prep, secondary research, content reviews, designs, graphics, and more.
Mitch Derman, Tracey Parry, and Tiffany Stronsky for continuing to advance our marketing, communications, and PR game. Your willingness to question, push, and share your ideas have helped take our program up to eleven. Your efforts to get the right buzz in the right places at the right times is amazing.
Laura Elias, Martina Jeune, and Faith Shea for an unbelievable impact on your firstTech Trends report. Thank you for bringing new ideas to the table and helping us push the boundaries of what we can accomplish.
Amy Bergstrom, Matthew Budman, Sarah Jersild, Anoop K R, Emily Moreano, Joanie Pearson, and the entire Deloitte Insights team. Your amazing partnership on Tech Trends helps us reach new heights every year.
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